The federal student loan payment and interest cannot last forever, and Joe Biden won’t cancel all existing federal loans. These two facts point to an inevitability: federal student loan payments will resume.
Though there are few topics most Americans can agree upon, it is probably safe to say that the vast majority of student loan borrowers like the payment and interest freeze. Some of these borrowers will be understanding when payments resume — others will be upset.
The certainty that some will be angry puts President Biden in a difficult position. He has to do something that will upset many and please few.
Timing the End of the Interest Freeze
It is impossible to pick a perfect time to end the payment and interest suspension.
Because there are millions of federal student loan borrowers, it is a certainty that some of them will be unemployed on the day Biden picks to resume payments. Some will have just lost their jobs, while others will be in the midst of an extended and challenging job hunt.
Each borrower faces unique circumstances, and because of this, payments will resume at the worst possible time for some borrowers.
When Biden unpauses payments and interest, millions of Americans will have less money in their pockets each month.
Making an unpopular decision requires careful timing. No politician wants to be responsible for millions of upset voters just before an election. For this reason, it is safe to assume that Biden will want to avoid ending the interest freeze during the 2022 or 2024 election cycle. Even though Democrats have enacted more borrower-friendly policies, if the payment freeze ends shortly before an election, they may lose many voters who are student loan borrowers.
Many Democrats are already calling on Biden to extend the payment and interest freeze. When the student loan relief ends, few politicians will applaud the move.
Why the September 30th, 2021 Expiration Works
Payments and interest were suspended due to the Covid-19 pandemic.
All Americans already have access to a vaccine for free. Unemployment levels are dropping, and the economy appears to be strong. Biden can make the case that the reasons that necessitated the student loan relief no longer exist.
If Biden waits much longer, he could hurt Democrats on the ballot in 2022. If he waits, economic conditions may get worse. September might not be the perfect time to resume, but it might also be the best option.
The Harsh Reality
Many Democrats prioritize student loans in their campaign platforms. Some even call for massive amounts of student loan cancellation or forgiveness. Objectively speaking, Democrats advocate for more student loan borrower-friendly policies.
However, when the dust settles on the student loan payment and interest freeze, two facts will be undeniable:
- A Republican suspended payments and interest on federal student loans.
- A Democrat started charging interest again and forced borrowers to resume payments.
How much of an impact this reality has on the political landscape remains to be seen. What is certain: Joe Biden will upset many borrowers and voters when he makes the unavoidable decision to end the student loan relief.