Biden could inherit the confusion of monthly payments restarting for tens of millions of Americans amid a pandemic.
At midnight on New Year’s Eve, President Donald Trump’s pause on student loan payments for 33 million Americans is set to expire, just three weeks before President-elect Joe Biden is slated to take over.
The Education Department started warning borrowers through text messages and emails this week that their monthly payments will resume in January. Even though Trump said this summer that he planned to later “extend” the freeze beyond Dec. 31, a White House spokesperson declined to comment on whether the president is still considering another executive action to move the expiration date.
If Trump doesn’t act unilaterally and Congress doesn’t act to avert the cliff either, Biden could wave his own executive wand once inaugurated, though the president-elect’s campaign will not divulge his plans. The intervening weeks of limbo could cause mass confusion and uncertainty for borrowers. For the incoming president, the economic and administrative mess could take months to untangle, consuming the early days of his Education Department.
The federal student loan system “was not designed to start and stop at the same time for 30 million borrowers,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group that represents the companies that collect and manage loan payments on behalf of the Education Department.