Biden Has a Problem: The Freeze on Student Loan Payments is Almost Over

Biden Has a Problem: The Freeze on Student Loan Payments is Almost Over

A slew of congressional Democrats, student loan advocacy teams and Education Department officers are pushing President Joe Biden to increase the federal student loan reduction program past Sept. 30, arguing that debtors are nonetheless caught in monetary turmoil as a result of financial impacts of the pandemic.

Borrowers first noticed the reduction program when Congress handed the Cares Act in March 2020, a invoice that froze all federal student loan funds and set rates of interest at zero p.c. Former President Donald Trump pushed the reduction deadline twice, adopted by Biden who prolonged the pause till the top of September 2021.

But some student loan advocates are calling to elongate the pause till March 31, 2022, whereas others have urged Biden to increase it till the top of the coronavirus pandemic.

“We’re calling on the administration to extend the pause on student loan payments to help support Arizona families as we continue our coronavirus recovery,” Sen. Kyrsten Sinema (D-Ariz.), who joined greater than 60 Democrats in writing a letter to the president in June, tweeted final week. “Extending the current pause on federal student loan payments will provide relief to Arizonans and help them continue to recover from the coronavirus recession.”

More than 125 organizations, together with the American Civil Liberties Union (ACLU), additionally despatched a letter to Biden to uphold his promise of mitigating the student loan disaster and lengthen the fee pause.

It’s unclear, nonetheless, whether or not the White House backs the extension effort. Several opponents argue that if the Biden administration agrees to elongate the paused fee interval, then the transfer would collide with the president’s messages over working towards financial restoration. Student loan debtors have skilled the pause for almost 18 months, so an excellent longer extension would point out that the economic system “is so bad that student loan borrowers need even more time to pay student loans,” in response to Zack Friedman, a contributor at Forbes.

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And the strain comes because the federal authorities is slated to finish two separate monetary reduction efforts referring to the pandemic, together with the improved unemployment insurance, together with the federal eviction moratorium applied by the Centers for Disease Control and Prevention ending on July 31. Both usually are not anticipated to be renewed.

But the president might eradicate the expanded jobless advantages and the eviction moratorium whereas extending the student loan compensation deadline, although that surfaces the query of “Why should student loan borrowers get relief when other essential relief is ending,” Friedman argued.

Friedman additionally famous that there’s reportedly no “distinction” between student loan debtors who can afford to make their funds after September 30 and those that can not.

Education Secretary Miguel Cardona has not explicitly supported or deflected the trouble, although he did be aware at a Senate listening to final month that, “Extending the pause is something that we have had conversations about.”

Rachel Bucchino is a reporter on the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report, and The Hill.

Image: Reuters