In a recent press briefing, White House Press Secretary Jen Psaki confirmed that the Biden Administration’s student loan payment pause is finally ending.
STUDENT LOAN PAYMENTS: Jen Psaki was asked if President Biden will extend the student loan payment pause. pic.twitter.com/F86ZSGtjiK
— Forbes (@Forbes) December 11, 2021
Wearing a dark-colored turtleneck with bizarre clavicular cut-outs, Psaki told reporters that the administration will release more details in the coming weeks. “We will engage directly with federal student loan borrowers to ensure they have the resources they need and are in the appropriate repayment plan,” she said. “We’re still assessing, ah, the impact of the Omicron variant, but a smooth transition back into repayment is a high priority for the administration.”
Payments are due to start being collected again beginning Feb. 4.
In March of 2020, citing the massive unemployment and financial uncertainty being caused by COVID-19 shutdowns, the federal government paused their collection of student loan repayments as well as interest accrual on student loan debt.
According to CBS News, “More than 42 million people had federal student loans of some form as of fall 2021, amounting to nearly $1.6 trillion in student loan debt, according to Education Department data. That includes more than 36 million with direct loans totaling more than $1.35 trillion.”
That’s a lot of debt, and the loss of these payments for the past nearly two years has been considerable. And no, it’s not evil, capitalist Wall Street that suffers that loss — you and I do. This is a great time to remind everyone that, as part of the historic Leftist power grab known as ObamaCare, the student loan industry was nationalized. (I know, I know; what the hell do student loans have to do with healthcare? Nothing. But when you have a fleeting supermajority, you rake in as much power as you can with both hands.)
Mary L. G. Theroux wrote in 2018 in the Independent Institute’s blog, The Beacon:
An often-forgotten provision of Obamacare, a/k/a the Affordable Care Act (ACA), was its take-over of the federal student loan program, with claims that doing so would provide vast financial windfalls to help offset the ACA’s costs: $61 billion over 10 years, according to the Congressional Budget Office (CBO). Before the ACA, about half of federal student loans originated with private lenders while being guaranteed by the government. With the passage of the Act, the government became both the lender and the guarantor.
Got that? The federalization of student loans and subsequent indenture of young, healthy people who had been brainwashed to think they needed a fancy college degree was supposed to pay for part of Obamacare. In a classic only-game-in-town racket, the government borrowed capital at low interest rates, then loaned it out to students at a marked-up rate.
And I’m sure you’ll be shocked — shocked — to learn that student loan repayments did not come anywhere near what they were projected to be.
With the federal government now in charge, millions of Americans have enrolled in the feds’ debt-forgiveness plans for their student loans, draining $11.5 billion from the program in 2015 alone—an eventuality neither politicians giddy to pass the misnamed Affordable Care Act nor the supposedly nonpartisan Congressional Budget Office apparently could foresee.
Thus, the take-over of the federal student loan program, rather than throwing off vast sums of money to cover spiraling healthcare costs, is instead saddling taxpayers with another bail-out: this time, of the rising number of students now failing to repay their loans.
And that was before COVID hit and the government pressed “pause” on loan repayments. This, even as an historical government spending spree on Pharma and WuFlu-related expenses hammered the healthcare system. One’s mind boggles, trying to imagine where the money for all this is coming from.
But for now, at least, the young Americans who are trying to start out their adult lives amid shutdowns, financial unpredictability, and onerous debt will resume paying back what they borrowed — at least, the ones who aren’t eligible for student loan forgiveness (yet). It won’t come close to covering the costs our leviathan government has backed with blue-sky projections of these payments, however. And one way or another we’ll all be bailing out the students who took on unreasonable debt amounts, the posh universities that exploited them by selling them worthless degrees at an insane cost, and the socialized healthcare system that was never adequately paid for to begin with. Redistributionism is an intrinsic part of our interconnected federal programs.
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