Soft cancellation (making X amount of dollar 0 percent interest) is probably politically tenable, and most conservatives i've spoken with feel that is fair. Avoids the moral hazard problem they bring up of "what about the people who paid back their loans?!". The continuing moratorium is effectively just making that the new policy.

But the only real reason it feels like the moratorium got continued is because Build Back Better failed and the Biden administration didnt want to compound that political failure with also breaking a major campaign promise. Though continuing student loans during election season also seems politically non viable as well. Especially if an astute Republican hits the drum of "make them zero interest!" to combat the issue.

The real problem is that I had heard (https://thehill.com/opinion/columnists/dick-morris/302247-lo...) that provisions of Obamacare actually use student loan interest payments as source of paying for that program. So a major democratic program is reliant on Student loans. This makes it even mnore of a political vulnerability because Republicans attacking student loans also weakens Obamacare.

To put the cherry on top. The Federal Reserve probably really wants student loans to continue. People paying those again is a powerful deflationary measure and puts less liquid capital in the market. It feels like the current admin from a policy perspective REALLY wants to start them back up, but know its politically damaging to do so.