The budget bill just passed by Congress has a sickening shock for student loan borrowers: federal loan payments are due again. Since March 2020, when the Covid-19 pandemic began, student loan payments to the federal government had been frozen. This freeze was extended 8 times throughout the pandemic. But now, Biden has agreed to a deal that will end the moratorium. By September 1, 40 million people will have to restart payment on this gargantuan and unpayable debt.
This will be an absolute catastrophe for millions of people. One school principal, who earns one hundred thousand dollars a year, said that even with her income she’s not sure how she’ll be able to pay off her student loans. If people who earn 6 figures can’t pay off student loan debt, then how will those with a lower income be able to?
And the end to this moratorium is coming after record levels of inflation for the past year and a half and real wages that are much lower than they were before the pandemic began. Adding student debt and interest payments on top of inflation and declining real wages is a recipe for disaster.