White House mulling another extension on student loan repayment pause

President Joe Biden is considering another pause on repayments for federally-backed student loans, which are set to resume at the end of August.

Bloomberg News reported on Tuesday that the new action from Mr Biden could take the form of either another short-term pause that would get borrowers through the fall or a longer-term action that would suspend all payments through next summer. The news outlet cited anonymous officials with knowledge of the White House’s discussions.

Mr Biden is also reportedly considering forgiving up to $10,000 in student loan debt per borrower.

The president has repeatedly issued short-term pauses on student loan payments since taking office in January of last year, but faces pressure from the left flank of his party to cancel all or at least some of the $1.6 trillion owed by Americans in the form of federal student loan debt. The Department of Education changed some rules concerning borrowing earlier this year, resulting in some loans being forgiven for about 40,000 people.

But the issue is a touchy one for the president, who has seen calls not just from left-wing members of his party, like Rep Alexandria Ocasio-Cortez, call for action on the issue but also faces pressure from Senate Majority Leader Chuck Schumer to cancel some student loan debt as well. Conservatives in the party argue that such a move would turn off more well-off voters who either did not take out student loans or repaid them through their own means. Progressives, meanwhile, argue that the issue is related to racial justice given that Black undergraduates are more likely than their white peers to take out loans to attend college.

That argument from progressives has grown louder in recent months as many argue that the Biden administration’s repeated punting on the issue is only serving to create more uncertainty on the issue.

A decision from the White House to act on the issue before the midterm elections in October could boost the turnout of Mr Biden’s base at the polls. Democrats are currently heavily favoured to lose control of the House of Representatives and potentially their thin Senate majority as well.