President Joe Biden will enact another extension of the pandemic payment pause for federally-backed student loans through Aug. 31.
Black and African-American college graduates have a disproportionate amount of student loan with an average of $25,000 more in student loan debt than white college graduates. And the debt increases for them at a higher rate following graduation. Four years after graduation, 48 percent of Black students owe an average of 12.5 percent more than they borrowed, according to the Education Data Initiative.
The current pause will expire after May 1. Former President Donald Trump enacted the pause amid the coronavirus pandemic in March 2020, and it has been extended multiple times by President Biden.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law by Trump in March 2020, paused payments and interest accrual on federal student loans. Since then the moratorium has been extended repeatedly.
Some Republican lawmakers have been critical of the pauses. Rep. Jim Banks of Indiana, for example, claimed that the Biden administration was “using COVID as a never-ending excuse to expand its power, waste taxpayer dollars and further fuel inflation.”
Several Democrats are call for Biden to cancel student loan debt in total. Sen. Chuck Schumer, a Democrat who has represented New York since 1999, and NAACP President Derrick Johnson teamed up to urge Biden to cancel student debt. In a joint opinion piece for BET, they wrote that the racial wealth divide will persist as long as student debt grows.
The opinion piece, posted on Feb. 28, detailed the impact of student debt in the country on Black borrowers. Schumer and Jackson noted how Black borrowers are more likely to take out student loans to begin with than their white counterparts, and while the median white borrower will owe just 6 percent of their student debt 20 years after entering college, the median Black borrower will still owe 95 percent of his debt at the end of same time period, Business Insider reported.
During the 2020 presidential campaign Biden promised to forgive $10,000 in debt per borrower, but he has yet to make good on that promise.
The payment pause has led to “an estimated $195 billion worth of waived payments through April 2022,” according to the New York Fed. The pause has benefitted an estimated 37 million borrowers, but roughly 10 million borrowers who have private or Family Federal Education Loan (FFEL) loans owned by commercial banks cannot benefit from the payment pause.