Federal student loans are about to come due again. Will Biden extend the pause amid Omicron flood?

Resumption of payments is seen as major land mine for Democrats before midterms

Activists hold festive signs calling on President Biden to cancel student debt and not resume student loan debt while musicians play joyful music, greeting the White House staff as they arrive to work on December 15, 2021 in Washington, DC. (Getty Images for We, The 45 Mill)

Biden administration officials said this week that a decision is imminent on whether millions of Americans will be forced to resume paying federal student loans back in February, when a pandemic-era pause is set to end.

White House press secretary Jen Psaki said on Tuesday that the decision was still under consideration, explaining that President Joe Biden “has not made a decision yet”.

Her words came in response to a report in Politico indicating that a decision would come from the Department of Education as soon as later this week.

"Later this week, we will be announcing whether to extend the pause further,” said an agency spokesperson.

Student loans in the US top $1.57 trillion in total value. Democrats have argued that beyond just instituting a pause in loan repayments, Mr Biden has the authority as president to cancel all or some of individual Americans’ loans, which are taken out from the government. Many experts have said that such a decision would represent a massive economic stimulus for millions of people, especially Black Americans.

Some progressives have made that argument pointedly: “You can't be anti-racist if you're anti-student debt cancellation,” tweeted Rep Ayanna Pressley, a Massachusetts Democrat.

If the Biden administration were to continue the pause, it would be a major reversal seemingly made in response to the sudden onset of the Omicron variant – though it would come at a time that the White House is smarting from a major setback in negotiations over the Build Back Better Act. Sen Joe Manchin, a Democrat from West Virginia whose vote is needed for the legislation, announced his opposition to the bill’s current form.

That setback is seen as one of the major hurdles facing Democrats in competitive House and Senate seats as they seek reelection next year in the midterm elections – when the party in power historically face losses. Action on student loan payments by the White House is seen conversely as an issue that could energise the administration’s supporters, particularly younger voters, ahead of those elections.

Ms Psaki was indicating as recently as a few days ago that the administration was preparing to resume repayments of student loans as soon as possible, telling reporters that “a smooth transition back into repayment is a high priority for the administration”.

The Department of Education has also set up new web-based resources for students and graduates to learn more about the resumption of student loan payments as the administration as a whole appears to be preparing for them to restart soon. The agency’s student loan site describes a number of ways that Americans can prepare for payments to resume, while stating that the pause set to end on 31 January was “final”.

Mr Biden pledged on the 2020 campaign trail to support action to cancel up to $10,000 of individual debt for student loan holders, but has yet to take action at the executive level and such a bill would likely have no future in the evenly divided Senate.