IN THE NEWS: Student loan repayments resume today
Today marks the end of a pandemic-era freeze on federal student loan payments, thrusting millions of Americans back into the financial realities of higher education debt.
Today marks the end of a pandemic-era freeze on federal student loan payments.
The Biden administration has promoted its income-driven repayment program as a “safety net,” allowing borrowers to avoid credit bureau reporting for delinquency. However, interest will continue to accrue during this forbearance period until October 2024, raising concerns about the long-term financial impact on borrowers.
The administration’s optional income-driven repayment program, known as SAVE, has also drawn scrutiny for its estimated $156 billion cost over a decade—a figure that could be significantly higher, according to the Congressional Budget Office. Republicans in Congress are moving to nullify the SAVE plan, citing its high cost to taxpayers and potential to incentivize colleges to raise tuition.
Meanwhile, the Biden administration continues to push for targeted loan forgiveness and mass debt cancellation. Just last week, $37 million in loan forgiveness was announced for students misled by the University of Phoenix, a for-profit institution. This adds to the tens of billions in debt relief already granted, sparking debate over the real cost to taxpayers.
As student loan payments resume, questions loom about the fiscal responsibility of the Biden administration’s policies. The true cost of these initiatives, both to individual borrowers and American taxpayers, remains unclear.