Biden could extend student loan relief beyond September 30, even if unemployment benefits and moratorium on evictions end
Student loan payments may be delayed beyond September 30, even if unemployment benefits and the moratorium on evictions end.
Here’s what you need to know.
Student loan borrowers, Senator Elizabeth Warren (D-MA) and now some members of the US Department of Education are all lobbying President Joe Biden to extend student loan relief beyond September 30, 2021. Currently, the following student loan relief is scheduled to expire on that date:
- no federal student loan payments;
- 0% interest on federal student loans; and
- no collection of defaulted student debt, including wage garnishment.
Some have called for extending this temporary student loan relief until March 31, 2022. Others have said to postpone student loan payments until “the end of the Covid-19 pandemic”, without specifying a specific date. nor how “the end” is determined. Others hope for an extension of some kind, even for a month or until the end of the year. If student loans aren’t suspended again, some say these 4 things will happen.
However, there can be no guarantee that this temporary student loan forbearance will be extended. At the same time, the federal government is ending two popular financial aid programs during the Covid-19 pandemic. The enhanced unemployment insurance will end this summer and will not be renewed. Likewise, the federal moratorium on evictions from the Center for Disease Control (CDC) will end on July 31, 2021 and will not be renewed. (That said, there may be similar relief programs available at state and local levels). So what about student loan relief? Can the President continue to provide student loan relief even though these unemployment benefits and the moratorium on evictions end? Yes, but there are political and political implications. Here are the pros and cons for Biden of extending student loan relief beyond September 30:
Student loans: supporters say they are extending student loan relief
Supporters of extending student loan relief beyond September 30 cite several reasons, including:
- The Covid-19 pandemic is not over;
- Millions of student loan borrowers are struggling financially to repay their student loans;
- The economy has not recovered from the impact of Covid-19;
- 90% of student loan borrowers are not ready to start paying off their student loans again;
- Student loan repayments will disproportionately affect people of color and low income or unemployed student loan borrowers; and
- Resuming student loan payments will hurt the economy as student loan borrowers who have to repay student loans again will not have enough money to spend in their local economy.
Student loans: the adversaries say the end student loan relief
Opponents of extending student loan relief beyond September 30 cite several reasons, including:
- The suspension of student loan payments means that taxpayers bear the cost to student loan borrowers;
- Student loan borrowers have been granted temporary student loan forbearance since March 20 for a total of about 18 months;
- Student loan borrowers will have received more than $ 90 billion in student loan cancellations by September 30;
- The Biden administration says the economy is recovering, and it would be a mixed message now to say that the economy is so bad that student loan borrowers need more time to pay off their student loans;
- Enhanced unemployment insurance and the moratorium on evictions end. Why should student loan borrowers get relief when other essential relief ends?
- There is apparently no distinction between student loan borrowers who can afford to pay off their student loans after September 30 and those who cannot, making any possible extension unfair and ineffective.
Student loans: final thoughts
There has been no final decision on whether to extend student loan relief beyond September 30. If Biden extends student loan relief, there are several options. If there is no extension, the Department of Education will notify you of student loan payments for federal student loans effective October 1, 2021. This discussion of temporary forbearance is separate from the current discussion. on canceling student loans. Biden has now canceled $ 3 billion in student loans since becoming president. That includes $ 1.5 billion in student loans that Biden canceled in this way. Biden has continued to cancel student loans in a targeted fashion and will continue to do so. If there is no extension, contact your student loan department to update your automatic payment and bank account information, if necessary, as well as to check your student loan balance and interest rate. . Also, be sure to evaluate your student loan repayment options so you can start saving money: