If student loan forgiveness is illegal, can it still be accomplished via an infinite payment pause?

Continuing with our Thanksgiving theme, we can give thanks to the most generous members of our society. The most praiseworthy generosity is, of course, giving away money that other people earned. If we accept that stealing a neighbor’s car and donating it to charity makes me a more charitable person, Washington, D.C., is home to the world’s most generous humans. As we try to chew our dried leftover turkey, let’s look at a notable example of generosity from the central planners… “Biden extends student loan payment pause as debt relief plan remains on hold” (NBC):

The Biden administration announced Tuesday that it would extend the payment pause on federal student loans, as President Joe Biden’s debt cancellation plan remains blocked in court.

The payment pause, which was previously set to expire in January, will be extended until June 30 or until the litigation is resolved — whichever comes first. If the litigation has not been resolved by June 30, payments will resume 60 days after that.

“I’m completely confident that my plan is legal,” Biden said in a video announcement. “But it isn’t fair to ask tens of millions of borrowers eligible for relief to resume their student debt payments while the courts consider the lawsuit.”

Federal student loan holders have not been required to make payments since March 2020, when President Donald Trump signed the CARES Act, which paused payments through September 2020 and stopped interest from accruing to alleviate the economic impact of the coronavirus pandemic.

In theory it is Congress that sets the budget. So it might be illegal for a president to forgive loans, such that the borrowers don’t have to pay for their gender studies degrees and the cost can instead be shifted onto the working class. And, since Congress can spend money and transfer costs from the working class to the laptop class, the original payment/interest pause in 2020 was definitely legal. But maybe it is also legal for a charitable president with a big heart to keep extending the pauses via executive order. The loan isn’t “forgiven” (illegal unless Congress does it and more accurately described as “transferred to the working class”), but it never has to be paid so long as a great humanitarian/philanthropist is in the White House. The original value of the loan eventually becomes insignificant due to inflation.


  • “Student Loan Pause Could Cost $275 Billion” (CRB): The pause costs over $5 billion per month and extending it through the end of 2024 would cost at least $120 billion. This would bring the total cost since Spring of 2020 to $275 billion. This represents about 70 percent of the cost of the President’s announced debt cancellation plan and is higher than the ten-year cost of President Biden’s proposal to double the maximum Pell Grant by 2029.

14 thoughts on “If student loan forgiveness is illegal, can it still be accomplished via an infinite payment pause?

  1. Congress once wanted to make copyright terms infinite. It could not do that legally, so instead it tried to extend the terms by 20 years, every 20 years. The last attempt failed, and now Mickey Mouse is going into the public domain.

  2. The court injunction is another stunt like the annual debt ceiling show. The expert witnesses got to make their billions before the executive order can pass.

  3. Once you’ve placed a down payment on something – even if the courts have to review whether you were allowed to make the purchase – you still have to pursue the transaction via alternate means as long and with as much vigor as you possibly can. You’re the President! You promised!

    The Buck Stops at Other People’s Money, and that means it’s just bucks and more bucks.

    And I loved the “But it’s not fair…” Biden may be getting some kind of progressive dementia, but at least he’s turning into the equivalent of a thirteen-year-old girl whose parents don’t want her to wear the short skirt and halter top to school with too much eye makeup and a lot of rouge.

    Finally, NPR did talk about this yesterday as I recall and their ladies of course nodded in agreement at the change in tactics.

  4. Oh man. I have been putting off accepting a new job that will pay me $120,001 so that I would qualify for this loan forgiveness of $10,000. I guess if the payment pause become infinite, that works for me too. I don’t have to pay back the $150,000 student loan that I owe.

    Everybody shut up and stop complaining about inflation or your other loans that will not be forgiven or paused. As for me, I’m doing just fine, thank for my subsidize housing, food, heating, cable, phone and healthcare.

    Now if you would excuse me, I have to finish booking my 10 days cruise vacation that I’m taking over the New Year week.

  5. If student loan forgiveness is illegal, can it still be accomplished via an infinite payment pause? Yes!

  6. Perhaps Student Loan Forgiveness could be made legal if the amounts forgiven were charged back to the Institution where the debt was incurred. Debt would be preserved and the government would have increased leverage over educational institutions to combat disinformation and misinformation on all campuses.

    • Why charge back to the institutions where the debt was incurred? Those institutions are in the business of making money. Those loans were made by the government to students on the false promise that EVERYONE is capable, worthy and entitled to a higher education and that no matter WHAT you study at an institution it is worth it.

      The government screws the young generation by giving them a false sense of hope and security and then the government screws the older generation by taxing them and inflation.

    • Eric: I’m with you on this one! Also, make colleges refund accumulated tuition to anyone who drops out (with an exception if the student transfers to another school and uses the credits). That would discourage them from admitting people who aren’t passionate about completing a degree program.

    • One of my professor friends at MIT ruined a faculty meeting with this idea. A top bureaucrat was talking about the school’s commitment to bringing in African-American students (as they were referred to then (and they came in only two genders as well!)). The bureaucrat then mentioned that roughly half dropped out because they had no interest in nerdism and that it was important to try to reduce this dropout rate. The professor raised his hand and asked if MIT would refund tuition to the families of the dropouts since it was really MIT’s fault for aggressively recruiting these folks into dreary science/engineering programs that few humans find enjoyable. This idea was not well-received…

    • @Philip, transferring credits to another school won’t work. Student’s will then attend a no-name school for 3 years and on year 4, to graduate, transfer to say MIT so that their graduation certificate states “MIT”. MIT will not allow this.

      Higher education schools are in the business of making money. Till when our government stops subsidizing higher education by making easy money available to students as a loan, this problem will never go away. Not everyone is made for higher education, but our government tells us otherwise.

  7. I was unaware of the student loan “payment pause” back during mid-2020 until I noticed, after 3 or 4 months, that my federal student loan servicer had stopped auto-debiting my checking account for the $165 monthly loan payment. I contacted them and instructed them to restart the auto-debit. I was again surprised when, after the restart, the payment was only $150; and I then learned that interest was not being accrued or charged during the (never-ending) payment pause.

    Then, during Oct. 2021, Pres. Bident announced the Temporary Public Service Loan Forgiveness Program (TPSLFP) offering federal student loan forgiveness for public sector workers that had not earlier applied for the original, more strict Public Service Loan Forgiveness Program (PSLFP) (initiated in 2007).

    Though I qualified, I never bothered to apply for the original PSLFP. I did, however, apply for the TPSLFP, and had the $7000 balance due on my federal studenr loan forgiven last month. Not only that, I got a refund of all 22 monthly $150 payments I made while under the “payment pause”!

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