Extending the Student-Loan Repayment Pause Is a Mistake
Letting borrowers play kick-the-can with their debts rewards high earners at the expense of the less affluent.
Who would benefit?
Photographer: Paul Morigi/Getty Images
By extending the moratorium on federal student-loan payments through the end of August, the Biden administration has cheered borrowers and those advocating for across-the-board debt cancellation. Taxpayers have little such reason to celebrate.
For the past two years, more than 40 million borrowers have been allowed to forgo making their monthly payments. The vast majority made no payments at all during the pandemic, even though the government set interest rates at zero. This has already cost about $120 billion in lost revenue; the latest extension will cost at least $17 billion more.