As the Supreme Court decides on what to do with President Joe Bidens proposed student debt relief plan, Education Secretary Miguel Cardona suggested that student loan payments could soon resume.
During testimony given to the House Education and the Workforce Committee on Tuesday, Cardona was pressed by Chair Virginia Foxx, R-N.C., on whether the administration would consider another pause to federal student loan payments.
We communicated that after the Supreme Court decision is made, loan repayments will start within 60 days of the decision, Cardona told the panel.
The ruling could come at any time between now and the summer, meaning borrowers should begin to prepare for monthly payments as soon as July.
President Biden’s plan calls for borrowers with incomes of up to $125,000 to receive up to $10,000 in federal student loan forgiveness. That amount increases to $20,000 for borrowers who received Pell Grants.
In March 2020, the Trump administration placed a pause on mandatory federal student loan payments due to COVID-19. The Biden administration continued the pause. Payments were slated to resume in January, but the Biden administration extended the pause amid uncertainty over its debt forgiveness program.
When payments do resume, the Brookings Institution said millions will likely be unprepared to make payments.
“Regardless of ones view on the merits of Biden’s loan cancellation plan, it is dangerous to ignore the substantial likelihood that judicial rulings will end the payment pause, strike down cancellation, or both. Failing to prepare at-risk borrowers for these outcomes is irresponsible and may inflict more harm on those who have already spent years struggling with burdensome student debt,” the group said.
Foxx called on Cardona and the Biden administration to not issue any more pauses.
Six times, the Department extended its pause on student loan payments, she said. Each time, American families scrambled to prepare for the restart of loan payments while education bureaucrats left them in the dark until the 11th hour. The American taxpayer has paid $175 billion for the repayment moratorium. It must end.
Foxx also objected to the Biden administrations plan to change income-driven repayments. Those making under $30,600 annually would not be required to make payments. The administration said it also would cut monthly payments in half for most borrowers.
This backdoor attempt to drive through the presidents free college agenda will cost the American people at least $230 billion over the next decade, she said.
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