Biden slammed as 19M student loan borrowers delay repayments after pandemic pause as debt tops $1.6T

WASHINGTON, DC: After the expiration of the last pandemic-related pause on student loan repayments in late 2023, borrowers in the United States have been slow to resume their payments.

This pause, which began in mid-March 2020 due to the Covid-19 pandemic, extended until September 1, 2023, lasting a total of three-and-a-half years.

19M borrowers yet to resume student loan payments

According to data from the Department of Education, as of the end of March 2024, nearly 20 million borrowers have resumed their student loan payments.

However, approximately 19 million borrowers have not restarted their payments, leaving their accounts in delinquency, default, or otherwise paused through deferment or forbearance, as reported by The New York Times.

Borrowers have until September to utilize an "on-ramp" that allows them to delay payments without having the non-payments reported to credit bureaus. Nonetheless, interest continues to accrue on their accounts during this period.

As of the end of March 2024, 42.8 million recipients of federal student loans collectively owed $1.62 trillion. The number of recipients has decreased to its lowest level since the third quarter of 2022, influenced by President Biden's initiatives to cancel or reduce outstanding balances for borrowers.

Several versions of President Biden's student loan debt cancellation plans have faced rejections or pauses by federal courts, leading the administration to seek alternative legally viable approaches. The latest initiative, the Saving on a Valuable Education (SAVE) Plan, encountered legal obstacles recently.

Last week, a federal court in Missouri barred the Biden administration from granting further forgiveness under the SAVE Plan. Simultaneously, a federal judge in Kansas declared the SAVE Plan unlawful, although a federal appellate court put this ruling on hold, allowing the Education Department to continue reducing payments under the plan.

Introduced in 2023, the SAVE Plan replaced the previous income-driven repayment (IDR) plan known as the REPAYE Plan. The SAVE Plan calculates borrowers' monthly payments based on their income and family size, reducing payments for nearly all borrowers. It offers forgiveness for borrowers who initially took out $12,000 or less in loans after ten years.

Additionally, the plan includes an interest benefit for borrowers who make their full monthly payment but do not cover the monthly accrued interest. In such cases, the federal government covers the remaining interest, preventing the balance from growing due to unpaid interest, according to the New York Post.

Internet reacts as 19M borrowers yet to resume student loan payments

The revelation that many student loan borrowers are delaying the resumption of their payments sparked a wave of reactions on social media, with many criticizing President Biden.

"Why would they when they’re hoping Biden will make the taxpayer pay it off?" one posted on X.

"They voluntarily signed up for a loan. Cancelling will instantly raise inflation. The Supreme Court ruled it to be illegal for a reason," another chimed in.

"Ummmm, no worries, JB will raise taxes to make up the deficit," a comment read.

"Tell the colleges to suck it up. Why do the taxpayers have to foot the bill for these irresponsible people? If you borrow money, you pay it back, period. Enough. Tired of our president using us to promote his warped agenda for votes," someone else fumed.

"You pay off my mortgage then I’ll vote for you. I want to see where 20 million illegals will live with no jobs and spend their time raping and killing young American women. NYC is paying $350 a night in a hotel but citizens sleep on the streets," another offered.

This article contains remarks made on the Internet by individual people and organizations. MEAWW cannot confirm them independently and does not support claims or opinions being made online.