JACKSONVILLE, Fla. – The Biden administration on Wednesday extended a student loan moratorium that has allowed tens of millions of Americans to put off debt payments during the pandemic.
The paused payments are estimated to be saving borrowers $5 billion a month, according to the U.S. Department of Education.
Loan payments have been on hold since the start of the pandemic. It started with the CARES Act and then was extended by former President Donald Trump and President Joe Biden.
But a prominent group of Democrats wants Biden to wipe out the debt for good.
”Good news! And now it’s time to #CancelStudentDebt!” Sen. Chuck Schumer tweeted after Biden’s announcement.
Today would be a 𝙧𝙚𝙖𝙡𝙡𝙮 great day for President Biden and Vice President Harris to #CancelStudentDebt.
— Chuck Schumer (@SenSchumer) December 22, 2021
Sen. Bernie Sanders said, “I applaud President Biden for once again pausing federal student loan payments for 45 million Americans. Now let’s cancel it. All of it.”
I applaud President Biden for once again pausing federal student loan payments for 45 million Americans. Now let’s cancel it. All of it.
— Bernie Sanders (@SenSanders) December 22, 2021
Daisy Tackett, who lives in Jacksonville and attended NYU and the University of Kansas, said canceling student loan debt would make a big difference in her life. She had to take out $250,000 in federal and private loans to graduate.
“Student loans are really important to me because, obviously, I have a lot of student loan debt,” Tackett said. “But I also am concerned because of how many other people have student loan debt. It’s holding people back from buying houses, from getting cars, it’s messing up their credit. It’s keeping a lot of people stuck when we were promised upward mobility from getting a college degree.”
A Florida financial attorney who specializes in student debt said students shouldn’t plan on their federal loan debt being wiped out by the government.
“Right now, you don’t have to worry about paying. But if you can pay, it’s very advisable to pay, because there’s no interest now accumulating on the balance that’s owed. Because there’s no interest on the balance that’s owed, every payment you make goes to the principal, which reduces that substantially,” said financial attorney Leslie Tayne.
According to Education Data Initiative, nearly 12% of Florida residents have student loan debt totaling $98.2 billion and the average student loan debt in Florida is over $38,000.
Biden signaled this week that he wants borrowers to resume paying off their loans once the new moratorium ends on May 1.
Republicans have also come out in opposition to canceling the debt, saying the Department of Education doesn’t have the legal authority.