- Restarting payments for the millions of Americans with student loans after more than two years will be practically, and politically, complicated.
- As a result, borrowers may get many more months before having to pay their loan bill again.
Recent news the White House is considering extending the payment pause for student loan borrowers once more came as a bit of a surprise to some.
The Biden administration has been insisting that the bills will resume in May, pointing out that the economy is riding a historic recovery.
However, restarting payments for the tens of millions of Americans with student loans after more than two years of being paused will be logistically, and politically, complicated, experts say. As a result, borrowers may not have to worry about the payments for many more months.
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Here are some reasons another extension could be coming.
1. Biden is still weighing student loan forgiveness
White House chief of staff Ron Klain said earlier this month the Biden administration wanted to make its decision on debt cancellation before it turned the payments back on.
"The president is going to look at what we should do on student debt before the pause expires, or he'll extend the pause," Klain said on the podcast "Pod Save America."
The administration may push back the payments because it isn't ready to announce its plan on forgiveness.
On the campaign trail, President Joe Biden promised to quickly cancel $10,000 per borrower, but he's increasingly under pressure from some Democrats and advocates to wipe out more. Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., are pushing him to cancel up to $50,000 for all.
Resuming the bills and then later reducing or erasing people's loan balances may lead to confusion, said higher education expert Mark Kantrowitz.
"Ideally, if the federal government were to forgive some student loans, they'd want to do so before the payment pause and interest waiver expires," he said.
But, more than that, Kantrowitz said, "the reasons for a further extension are driven by politics, not policy."
He went on, "Restarting repayment without forgiving student loans will provide progressives with another opportunity to criticize the Biden administration."
2. The midterms are looming
To that point, some Democrats and advocates have said resuming student loan payments before the midterm elections in November could hurt Democrats on the ballots.
"Restarting student loan payments just before a midterm election is politically idiotic," said Luke Herrine, former legal director of the advocacy group the Debt Collective, a national union of debtors.
The Government Accountability Office found that as many as half of people with federal student debt may be at increased risk of delinquency when payments turn back on, which the Biden administration likely doesn't want to see headlines about as Election Day approaches.
A recent poll found that nearly two-thirds of likely voters are in support of Biden canceling some or all of student debt, with more than 70% of Latino and Black voters in favor.
3. Multiple loan servicers are changing
Three companies that serviced federal student loans — Navient, the Pennsylvania Higher Education Assistance Agency (also known as FedLoan) and Granite State — all recently announced that they'd be ending their relationship with the government.
As a result, around 16 million borrowers will have their accounts transferred to a different company.
These transitions are still underway and extending the pause may give the government and servicers more time to get ready for the resumption of payments.
"Changing a borrower's loan servicer and restarting repayment at about the same time may contribute to borrower confusion," Kantrowitz said.
Correction: Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., are pushing President Biden to cancel up to $50,000 for all. An earlier version misstated the figure.