More Pauses Mean Taxpayers Suffer
WASHINGTON, D.C., August 23, 2022
The Biden administration is expected to announce its decision on whether borrowers will resume repayment on student loans—yet regardless of the President’s decision, taxpayers will be hurt. Coming out of the COVID-19 pandemic, Americans needed a decisive leader. Unfortunately, this administration did the one thing Americans did not need: wait.
August marks the 20th month of loan repayment pauses since Biden took office, meaning borrowers did not put a single penny towards paying down their student loans. The loans, however, haven’t disappeared. Taxpayers are being forced to absorb the cost, which clocks in at about $4.3 billion every month.
This is unsustainable, and the Biden administration’s plan to kick the can further down the road is causing significant problems for student borrowers and loan servicers. The Student Loan Servicing Alliance (SLSA) warned the Department of Education that Biden’s inaction has created confusion and stress that will be extremely difficult to resolve. The letter echoed the worries of millions of borrowers who are experiencing deep concern about the recalcitrance of the Biden administration.
Simply put, President Biden is confusing borrowers and harming taxpayers. Extending the repayment pause through 2023, which the administration is likely to announce tomorrow, would exacerbate Biden’s inflation crisis and inflict more pain on Americans already struggling to put gas in their cars or food on the table.
Coupled with Democrats’ massive spending agenda and the recently passed so-called “Inflation Expansion Act,” the President is dead set on pouring money into an overheated economy—like pouring gasoline on a wildfire. It’s no surprise that leading experts like Larry Summers, former Treasury Secretary and a top economic advisor under President Obama, argue that the repayment pause is “the worst idea” when it comes to fixing Biden’s inflation crisis or reining in college costs.