If you’re among the 42 million Americans with federal student loan debt, here’s a spot of good news: president Joe Biden has extended forbearance on payments through the end of September. This continues the Covid-19 relief first enacted by former secretary of education Betsy DeVos and then passed by Congress in March of last year, intended to lessen the financial burden faced by Americans during the economic crisis.
But Americans’ $1.7 trillion in student loan debt is a driver of inequality and a drag on the economy even in comparatively stable times.
Research suggests that student loan debt exacerbates the racial wealth gap (pdf): One 2019 study (pdf) found that 20 years after starting school, the median Black borrower still owed $18,500 in federal student loan debt, while the median white borrower owed just $1,000.
Student loan debt has also been linked to lower homeownership rates, less consumer spending, and fewer new small businesses (it’s tough to take a gamble on entrepreneurship when you’re still paying off college).
So what are the chances Biden will make more moves on student loan relief? Here’s what we know so far about his plans.
What Biden is definitely doing:
On his first day in office Wednesday, Biden directed the Education Department to continue the suspension of interest and payments on federal student loans until at least Oct. 1. The government will also continue the pause on collections of federal student