Biden May Extend Student Loan Relief Again — Key Details

Biden May Extend Student Loan Relief Again — Key Details

President Biden could enact a last-minute extension of the continued federal student loan cost pause. Here’s the most recent.

‘Final’ Extension Of Student Loan Payment Pause Ends Next Month

Federal student loan funds have been suspended since March 2020, following passage of the CARES Act. That laws additionally froze federal student loan curiosity, and stopped all collections efforts on defaulted federal loans. The CARES Act initially contemplated a six-month pause in student loan funds, however former President Trump and President Biden prolonged that reduction a number of instances because the Covid-19 pandemic and related financial fallout persevered over two years. Biden’s most up-to-date extension is ready to finish on January 31, 2022.

Administration officers repeatedly said that this might be the “final” extension of student loan reduction, and rejected calls to increase the reduction but once more by student loan borrower advocacy teams and Democrats in Congress. But these calls have solely grown louder in latest weeks as document inflation has taken maintain, and the nation is dealing with a fifth pandemic wave because of the Omicron variant.

“Restarting student loan debt payments would take more than $85 billion dollars out of our economy next year,” mentioned Sen. Elizabeth Warren (D-MA) in a tweet on Tuesday. “We’re still in a pandemic and people are still struggling. [The President] shouldn’t restart payments.”

Earlier this month, a coalition of over 200 civil rights organizations, labor unions, and client safety teams wrote to President Biden, urging him to increase the cost pause once more. “In fewer than 60 days, tens of millions of student loan borrowers are slated to be thrown back into repayment on federal student loans they are ill-equipped to pay as the deadly COVID-19 pandemic continues to devastate Americans’ health and financial security,” wrote the coalition. “We… write to urge you to put a stop this crisis in the making before it begins and extend the current pause on student loan payments.”

Biden Reportedly Considering Another Extension of the Student Loan Payment Pause

As first reported by POLITICO, the Biden administration is now actively contemplating extending the student loan cost pause once more. White House Press Secretary Jen Psaki mentioned on Tuesday that President Biden “has not made a decision yet,” indicating {that a} additional extension may be very a lot on the desk. The remark is markedly totally different from earlier statements by the administration as just lately as final week, when White House officers indicated that the administration was specializing in a “smooth transition to repayment” after the moratorium ends on January 31.

The abrupt shift in messaging could trigger confusion for some debtors. The Department of Education has been sending out mass emails to student loan debtors warning them of the upcoming return to reimbursement. And up via this week, key federal student support officers have been persevering with to amplify messages concerning the return to reimbursement. “Higher ed partners: Help spread the word!” mentioned Federal Student Aid Director Richard Cordray in a tweet on Tuesday. “Encourage borrowers to contact their loan servicer to restart auto-debit or sign up for auto-debit for the first time.”

But advocates for student loan debtors supplied reward for the administration’s shift. “We are extremely encouraged to hear that President Biden is considering an extension of the federal student loan payment pause,” mentioned Student Borrower Protection Center Policy Director and Managing Counsel Persis Yu in an announcement. “Prior to the pandemic, federal student loans were crushing 43 million student loan borrowers, and the payment suspension has been vital to ensuring that those very borrowers can keep their head above water.”

“This is welcome news and would absolutely be the right call,” mentioned Rep. Ayanna Pressley (D-MA) in a tweet. “Extending the pause will help millions of borrowers and their families weather this ongoing pandemic.”

No particular particulars have been launched a few doable further extension of the student loan pause, and no closing selections have been made. But officers indicated extra data could also be launched by the tip of the week.

Further Student Loan Reading

Student Loan Interest: Agreement Reached To Curtail Some Runaway Balance Increases

Big Changes Coming To Student Loan Repayment In 2022

Details On New Student Loan Income-Based Payment Plan: Some New Benefits, But Advocates Are Disappointed

Student Loan Forgiveness Changes: Who Qualifies, And How To Apply Under Biden’s Expansion Of Relief

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