Biden administration extends student loan payment pause
Yahoo Finance’s Rick Newman discusses President Biden’s assessment of the coronavirus pandemic after the administration extended the federal student loan payment pause, which was initially billed as an emergency measure.
Brad Smith: Welcome to Yahoo Finance Live, everyone. It’s been a big week at the White House, as there have been new Supreme Court justices, one in particular. And then on top of that, you also have the extension of the COVID-era moratorium on student debt repayment. Oh, and some big business meetings with the White House too. For everyone from Bidenomics, if you will, we bring in Rick Newman from Yahoo Finance. And Rick, maybe we’re focusing on what this extension of student debt repayment to August 31 means.
RICK NEWMAN: Well, going all the way back to the CARES Act, which Congress passed in 2020, over two years ago at this point, which included a temporary moratorium on people repaying their student loans. So you didn’t have to repay your student loans. There was no penalty, and you didn’t have to — you wouldn’t accrue more interest during that period. It ended in September 2020. President Trump extended it two more times. And Biden has now extended it four more times. And I’m pretty sure he’s going to make it even longer.
So this moratorium now goes until August 31. But there’s no way, two months before the midterm elections, Biden is going to say, OK, everyone has to start paying off their student loans again. So he’s probably going to kick that around until the end of the year. So people won’t have to repay until at least 2023. So it’s an emergency — remember, it’s an emergency measure. It’s supposed to be something that’s going on because the economy is in dire straits.
And the economy is not in dire straits. Moody’s Analytics published an analysis indicating that there was no reason to continue this policy. It is not justified for economic reasons. But of course it is extended for political reasons, not for economic reasons. Other parts of the economy, President Biden says, oh, the emergency is over. He ended the immigration law, the migration law, which allows the government to deport people. It was also a COVID emergency measure. It will end on May 23. So we have, on the one hand, the emergency is still ongoing. And on the other hand, the emergency is over. Go figure.
EMILY McCORMICK: And Rick, as you point out in your article on Yahoo Finance Now, there hasn’t been a standardized criteria for determining when the COVID emergency is over. Have any proposals been put forward to remedy this? And is there a political incentive at this point to even do that?
RICK NEWMAN: I think it’s all random and piecemeal, and of course, adding to the federal question of whether we’re still in an emergency, you have states and cities that have their own measures. The Secretary of Health and Human Services actually determines if there is a public health emergency. And this official says there is still a public health emergency, which justifies things like masking on planes and at airports. But in many ways, we just don’t have a consistent way of saying emergency on, emergency off.
And of course there’s a difference between if it’s an economic emergency, which it almost certainly isn’t at this point, and if it’s still a health emergency. public. So in the beginning we clearly had both an economic emergency and a public health emergency. We absolutely no longer have an economic emergency. And public health, COVID could return in the fall. There could be other variants, and vaccines could decline, so it could come back. But you want to know if it’s over or not? Decide yourself. The government cannot.
Brad Smith: Rick Newman of Yahoo Finance. Rick, appreciate your time and ideas this afternoon. Happy Friday to you.