Biden’s New Budget Proposal Excludes Student Loan Relief, But There’s Still Time to Extend the Repayment Pause – CNET [CNET]

President Joe Biden’s budget proposal for the 2023 fiscal year didn’t touch on student loan cancellation or an extension to the repayment pause. With only 33 days to go until federal student loan payments are set to resume, student debt cancellation seems unlikely — but there’s still a chance the student loan moratorium will be extended.

Among other things, Biden’s $5.8 trillion budget proposal provides $2.7 billion to the Department of Education’s Office of Federal Student Aid — a 43% increase over last year — to “provide better support to student loan borrowers,” according to the budget. 

“Specifically, the increase allows FSA to implement customer service improvements to student loan servicing and to ensure the successful transition from the current short-term loan servicing contracts into a more stable long-term contract and servicing environment,” the budget proposal outlines.

Moreover, the budget proposal doubles the maximum Pell Grant award, and increases funding by $752 million for historically Black colleges, tribally controlled colleges and minority-serving institutions.

And… that’s it. The budget proposal doesn’t mention extending the student loan moratorium or canceling student debt. But with a month to go until payments resume, there’s still a chance the pause may be extended — and there are some significant clues pointing in that direction.

What to know about the federal student loan repayment pause

Student debt repayments have been on pause since March 2020 and are currently set to resume May 1, 2022. On March 3, White House Chief of Staff Ron Klain said that Biden was going to decide whether to cancel student debt before the pause expired, or, alternatively, that he’d extend the pause. The following week, Department of Education officials started instructing companies managing federal student loans to pause sending notices about payments starting up again, as first reported by Politico.

While on the campaign trail, Biden said he’d support legislation canceling a minimum of $10,000 of federal loans per borrower. However, the White House has been largely silent on the issue since Biden took office, though the Department of Education made moves on this front in the last couple of months.

Following the Department’s revamp of its Public Service Loan Forgiveness program in October 2021, 70,000 borrowers had their student loans extinguished, collectively reaching nearly $5 billion as of January. Subsequently, in March, the Department announced that approximately 30,000 more have been deemed eligible for relief under the Public Service Loan Forgiveness waiver.

Whether Biden has the legal authority to unilaterally cancel student debt through executive action, without legislation from Congress, is still unclear. The Department of Education released a memo (PDF) on this issue last year, but the highly redacted document offers little information for public eyes.

Federal student debt repayments have been paused for nearly two years now. Since the pause was first enacted, interest hasn’t accumulated and collections on defaulted debt have been put on hold.

Former President Donald Trump first enacted the pause on student loans in March 2020 and extended it until January 2021. Biden extended the pause two more times after taking office, with his administration warning that the January extension would be the last. 

However, with the omicron variant of COVID-19 sweeping through the US last year, Biden’s administration decided to further extend the student loan repayment moratorium until May 2022.

Millions of student loan borrowers “need some more time before resuming payments,” according to Biden’s statement last year.

Biden also called on student loan borrowers to “do their part” and “take full advantage of the Department of Education’s resources to help you prepare for payments to resume; look at options to lower your payments through income-based repayment plans; explore public service loan forgiveness; and make sure you are vaccinated and boosted when eligible.”