Corrects fourth paragraph to say freeze on student loan payments ends Jan. 31.
Eighteen months after President Joe Biden said every borrower with federal student loans should have at least $10,000 wiped away, and with the freeze on federal loan payments set to end in January, borrowers want to know what’s going to happen.
And in the absence of any news, and as time passes, it would appear the public assumes the chance of student loan forgiveness is dwindling. According to an August poll by the Federal Reserve Bank of New York, the perceived likelihood of forgiveness expanding dipped significantly for the first time since 2019. So far only a relatively small number of borrowers who have disabilities or who the government said were misled by their schools have had their loans forgiven.
Biden ran for office in 2020 on a pledge to forgive at least $10,000 per borrower of federal student loans, but has yet to say if, when, or how he plans to make it happen. More progressive lawmakers from his party have urged him to erase $50,000 rather than $10,000, and with an executive order at that.
But some experts say forgiveness must be approved by Congress, and even Biden has been reluctant to bypass the legislative path. Meanwhile, borrowers who have enjoyed a freeze on payments and interest since shortly after the pandemic hit are waiting to see if he will make a move before the pause ends Jan. 31.
The NY Fed has been asking consumers about this policy since 2015 as part of a three-times-a-year survey on public policy. The average predicted chance that the government will expand student loan debt forgiveness in the next year fell to 39.5% in August, down from an all-time high of 42.7% in April.
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