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President Joe Biden recently extended the federal student loan payment pause until August, which constitutes the seventh such extension since March 2020. The extension buys time for the administration to decide whether to make taxpayers pay off all $1.45 trillion of student debt—a key campaign promise. As the midterms are fast approaching, the next several months will be crucial for the administration.

Some Democrats believe Biden’s pause is too moderate and have reignited calls for massive loan cancellations. But what they miss is that the student loan pause is already forcing U.S. taxpayers to absorb college debt.

How can this be? It is the natural consequence of two factors: the 0 percent interest rate on federal loans during the pause, and rapid inflation.

The 0 percent interest rate already cost taxpayers a substantial amount due to the significant default rates on student loans. But rapid inflation—which was 8.5 percent in March—compounds the effects of the interest rate. 

Borrowers benefit from inflation because their loans become worth significantly less than their original value. In other words, just as inflation devalues your savings, it also devalues your debt. And when inflation is high, that devaluation occurs at a rapid pace.

Each extension results in higher losses to taxpayers due to the loan devaluation. And the borrowers can reduce their debts simply by deferring payments.

This is convenient for student loan borrowers. But it is by no means fair to other Americans who struggle just as much with rising inflation. Not only does the pause provide special privileges to people who took out loans to attend college, it also forces those who did not take out such loans to foot the bill.

President Biden has defended the decision to “pause” student loan payments by claiming that resuming payments would “threaten Americans’ financial stability.” But which Americans? Those who are most affected by payment pauses and taxpayer payouts of any kind are typically doctors and lawyers. These high-income professionals carry the most debt by far, but they are not the Americans who have been most harmed by the lockdown-era economic slump. On the contrary, many doctors have done particularly well during this time. 

Ironically, the payment pause belongs to a slew of poorly chosen policies that “threaten Americans’ financial stability.” Over the past year and a half, the Biden administration has expanded spending programs and increased regulations, leading to the very same economic problems they claim to be solving.

The payment pause adds to the struggles of everyday Americans, who currently face sharply rising grocery and gasoline bills. Instead of using the poor economy as an excuse for handouts to certain citizens, the administration should focus on improving the economy as a whole.

The administration also lacks a strategy to prevent the future growth of the student debt crisis. Payment pauses and even loan bailouts might be temporary “fixes,” but they don’t address the underlying issue of government-inflated higher education costs. To fix that issue, federal student aid and student loans must be significantly scaled back and refocused toward students who are likely to earn a return on their degrees. 

The Biden administration wants to pretend that so-called payment pauses are a more moderate, temporary alternative to radical policies such as universal loan bailouts. In reality, payment pauses already constitute debt forgiveness in all but name. The administration should end the pause as soon as possible and stop granting special privileges to especially the highly educated.