Student loan payments may be postponed after September 30 even if unemployment payments and an eviction moratorium end.
Here’s what you need to know.
Student loan borrowers Senator Elizabeth Warren (M.D.) and now some members of the US Department of Education are lobbying President Joe Biden to extend student loan benefits beyond September 30, 2021. The following student loan exemption is currently set to expire on this date:
- no federal student loan payments;
- 0% interest on federal student loans; as well as
- non-collection of student loan debt in the event of default, including the repayment of wages.
Some have called for this temporary student loan exemption to be extended until March 31, 2022. Others said they should postpone student loan payments until “the end of the Covid-19 pandemic”, without specifying a specific date or way of determining the “end.” Others are hoping for any extension, even a month or until the end of the year.
However, there is no guarantee that this temporary student loan waiver will be extended. At the same time, the federal government is completing two popular financial assistance programs during the Covid-19 pandemic. Extended 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 extended. (However, there may be some similar assistance programs available at the state and local level.) So what about student loan benefits? Can the President continue to pay off the student loan even if these unemployment benefits and the moratorium on evictions end? Yes, but there are political and political implications. Here are the pros and cons of extending student loan benefits after September 30:
Student Loans: Proponents Talk About Extending Student Loan Benefits
Proponents of extending student loan benefits after September 30 cite several reasons, including:
- The Covid-19 pandemic is not over yet;
- Millions of student loan borrowers have financial difficulties in paying off student loans;
- Economy has not recovered from the impact of Covid-19;
- 90% of student loan borrowers are not ready to start repaying the student loan again;
- Student loan payments will disproportionately hurt people of color and student loan borrowers with low income or unemployed; as well as
- Resuming student loan payments will hurt the economy as student loan borrowers won’t have enough money to spend in the local economy.
Student loans: opponents say the end student loan relief
Opponents of extending the student loan exemption after September 30 cite several reasons, including:
- A suspension of student loan payments means that taxpayers bear the cost of student loan borrowers;
- Student loan borrowers received a temporary grace period on their student loan from March 20 for a total of approximately 18 months;
- Student loan borrowers will receive over $ 90 billion in student loan cancellations by September 30;
- The Biden administration says the economy is recovering, and it would be a mixed signal to say the economy is so bad that student loan borrowers need even longer to pay off student loans;
- Enhanced unemployment insurance and a moratorium on evictions are ending. Why should borrowers of student loans receive assistance when other important assistance measures are running out?
- Obviously, there is no distinction between student loan borrowers who can afford to pay off their student loans after September 30th and those who cannot, making any possible loan extension unfair.
Student Loans: Final Thoughts
The final decision on the extension of the student loan exemption after September 30 has not yet been made. If Biden extends his student loan exemption, there are several options. If there is no renewal, the Department of Education will notify you of federal student loan student loan payments starting October 1, 2021. This interim discussion of cancellation is separate from the ongoing discussion of student loan cancellation. Biden canceled $ 3 billion in student loans after becoming president. This includes $ 1.5 billion in student loans that Biden canceled in this way. Biden continued to purposefully cancel student loans and will continue to do so. If there is no renewal, contact your student loan professional to update your auto payment and bank account information and check your student loan balance. Also make sure you evaluate your student loan repayment options to start saving money:
Student loans: additional information