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The student loan pause has been extended until the end of August

LEILA FADEL, HOST:

The Biden administration is extending the moratorium on federal student debt and allowing borrowers who are in default to start over with a clean slate. Education Secretary Miguel Cardona tells NPR a reset is the right thing to do.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

MIGUEL CARDONA: We know so many of our borrowers have fallen on hard times even before the pandemic. They maybe had delinquency in payments. Or they've had to default on their loans. And what we want to do is make sure they have a fresh start. We want to make sure that their loans are put in good standing again.

FADEL: Let's hear now from someone who wants the administration to go even further. Mike Pierce is executive director of the Student Borrower Protection Center. Mr. Pierce thanks for being here.

MIKE PIERCE: Thanks for having me.

FADEL: So your organization advocates for federal student loans to be forgiven entirely. Do you see this extension and clean slate for those in default as a step in that direction?

PIERCE: Absolutely. This is a breath of FRESH AIR for tens of millions of people and very welcome news. But it also sets up a very high-stakes decision for President Biden over the summer. The extension of the pause on student loans only lasts until the end of August, at which point 35 or 40 million people are going to find themselves right where they were yesterday morning when they woke up. Joe Biden ran on a promise to cancel student debt for everybody. It's what people with student debt expect from this administration. They're the people that put him in the White House. And it's time for Joe Biden to keep his promise.

FADEL: I mean, I got to ask, though, you know, the extension expires in August right now, which has surprised a lot of people, before the midterm elections in November. But this is a big issue for many voters, as you mentioned, saddled with huge loans. What do you think the political implications would be if the moratorium isn't extended?

PIERCE: I think this is actually a sign of something really big to come. It would be political malpractice for Joe Biden to restart student loan payments just weeks before tens of millions of people with student debt go to the polls. It doesn't seem to me like the White House here just set up Joe Biden to kick his base in the teeth right before they have to go vote. I think, instead, we're going to see the president keep his promise to people with student debt right when it matters most.

FADEL: But how fair is fresh start for student loan borrowers who faithfully made payments every month and now have partially or fully paid off their loans when others haven't?

PIERCE: The student loan system has been broken for decades. And millions of people that have fallen behind on their loans have done so through no fault of their own. Millions of people have this right to make payments based on how much money they make rather than how much debt they owe. And we know, based on reporting from NPR and reporting from others, that this just hasn't worked for decades. And the lowest income people have ended up in default instead. Fresh start is about justice, and it's about equity. It's not about taking away from people that have been paying their bills. It's about making sure that everybody gets to start from the same place when the student loan system boots back up again.

FADEL: What do you say to critics who say, look; canceling student loans would just incentivize colleges and universities to raise tuition even higher?

PIERCE: America's facing a student debt crisis. And that exists whether or not college is made free tomorrow. People have been saddled with debts that they can't afford because our higher education system is broken and because we've relied on debt to pay for it for two generations. This is, again, just about justice and equity. And whether or not you make college free, people are still struggling under the weight of tens of billions of dollars of student debt.

FADEL: On the campaign trail, President Biden ran on a promise to forgive up to $10,000 in student debt per borrower. That hasn't happened. Is there any chance that a measure like that would make it through a divided Congress?

PIERCE: The good news about the pledge by the president to cancel student debt is that he doesn't need Congress to act. The Higher Education Act of 1965 gives the president all of the legal authority he needs to cancel student debt for everybody tomorrow. It is just a question of political will.

FADEL: But he says he needs Congress, right?

PIERCE: Well, the president has said a few different things. Importantly, at the beginning of the administration, he asked the Justice Department and the Education Department to figure out whether he can cancel debt through executive action. And all signs point to a happy ending here for people with student debt. We haven't gotten an answer back yet from the government's lawyers. But at the same time, no one has said no yet. And it seems like the decision that's getting set up for the summer is going to have a happy ending.

FADEL: If there's no broad cancellation of student debt, what's the next best path in your view?

PIERCE: Keeping the student loan system off is really important on its own terms. We joined with hundreds of other progressive organizations to call on the president to keep the student loan system turned off until he keeps his promise to cancel student debt and also to fix what's wrong with the student loan system. So I mentioned before there have been scandals with this program called income-driven repayment that's supposed to give people a right to an affordable payment. The president needs to fix that and use this extraordinary authority he has so that everyone that's been in debt for decades, more than 4 million people, also get their debts cancelled. Fixing the broken system is the next most important thing.

FADEL: Mike Pierce, executive director of the Student Borrower Protection Center, thank you for your time.

PIERCE: Thanks for having me. Transcript provided by NPR, Copyright NPR.