Loan payment

‘Economy didn’t explode’ during student loan payment pause: Mondaire Jones

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  • A Data for Progress poll found that the majority of Americans want some or all of their student debt forgiven.
  • Citing this, Rep. Mondaire Jones said President Biden should cancel student debt.
  • He argued that the “economy has not imploded” since payments were halted during the pandemic.

President Joe Biden has already extended the pause on student loan repayments three times, and there’s no reason he can’t go all the way and write off every federal borrower’s student debt.

At least, that’s what New York representative Mondaire Jones thinks.

A recent poll by Data for Progress and the Student Borrower Protection Center found that the majority of voters supported canceling some or all of the student debt. According to a February 4-6 poll of 1,159 likely voters, 63% of respondents favor broad relief – 25% said all student debt should be eliminated while 38% said a certain amount of debts should be erased.

Citing those results, Jones wrote in a Monday blog post that student debt forgiveness “is hugely popular with voters and would bring real and meaningful relief to millions of Americans.”

“The sky didn’t fall and our economy didn’t implode” in recent student loan payment breaks, Jones said. “Americans who found themselves with disposable income started spending it on food, car payments and housing, among other things, in fact to strenghten economy in the process.”

“A third extension would be welcome,” added Jones. “But we can’t keep band-aiding a worsening wound. The cycle of indefinite deferral is as unsustainable as the debt itself. And if the country can afford to keep deferring those loan repayments, we can afford to cancel the debt altogether.”

Student loan payments have been on pause since March 2020, and given the pause’s repeated extensions, Democratic lawmakers like Jones have argued that if Biden can afford to keep pushing back the payment restart date, he can clear the $1.7 trillion. student loan portfolio. The Democrats’ argument is that broad student loan relief would be an economic stimulus, benefiting low-income borrowers the most.

Insider previously analyzed the impact of the lack of student loan payments during the pandemic on the US economy, and the consensus of a number of experts was that overall the economy does not need to these payments to stay afloat.

Charlie Eaton, an economic sociologist and researcher at UC Merced and co-author of a Roosevelt Institute study that found student debt forgiveness is gradual, told Insider that “one of the big features of today’s economy” is the big quit because it means people feel confident they can find a job that will pay them well – and the resumption of student loan payments would prevent that.

“If people are trying to get back into the workforce, but you can’t get a home loan or a car loan, or you can’t buy a car, it’s harder for people to find jobs than they’re ready to take it,” Eaton said.The National Association of Realtors recently found that more than 51% of borrowers put off buying a home because of their debt.

Not only will the absence of student loan repayments give Americans some employment flexibility, it has also allowed them to pay other burdens. One borrower, for example, previously told Insider that missing monthly payments on her student loans saved her $377 a month, allowing her to fully pay the medical bills of having a baby.

But progressive and conservative lawmakers and pundits are divided on the true impact that continuing student loan relief will have on the economy. Arkansas Sen. Tom Cotton tweeted last week that another extension of the suspension of payments is “a terrible idea”, echoing Republican House Education’s top executive Virginia Foxx, who recently decried another extension as “a disturbing trend of wholesale student loan forgiveness, which would be a huge mistake, with major consequences for borrowers and taxpayers.”

Biden has yet to indicate whether another extension, or broad student loan forgiveness, is coming, but Democrats say it’s time for him to fulfill a campaign promise and give borrowers the relief that they deserve.