Last week, a group of Democratic senators sent a letter to President Biden asking him to extend the break in federal student loan payments to at least March 2022. In addition, the University of South Carolina has written off over $ 9 million in institutional student loan debt for eligible students. Here’s what you need to know about student loan news this week.
2 current student loan trends for the week of 19 Jul 2021
1. Democratic Senators urge Biden to extend the break in student loans
On July 13, Democratic Senator Elizabeth Warren and Edward J. Markey sent a letter to President Biden calling for an extension of the current pause in payments and interest on federal student loans to at least March 31, 2022. Student Loan Services plans to move towards the current end of the abstinence period on September 30th.
“The resumption of payments is currently scheduled for October 1, 2021, but the information we received in our request strongly supports the extension of the pause in payments and interest on student loans,” the letter said. “The responses to our inquiry show that neither the borrowers of student loans nor their servants are ready to resume payments.”
The letter mentions numerous obstacles to resuming repayment on October 1. Not only did borrowers not contact their service providers during the pandemic pause in payments, but the service companies themselves will require more staff to support such a large-scale transition. FedLoan Servicing also recently announced that it will not renew its contract with the US Department of Education, and transferring all existing FedLoan credits to other service companies will add additional burden.
How does it affect student loans
The administration has yet to announce an extension of the abstinence period, and it currently expires on September 30, 2021. Borrowers should prepare start making recurring payments or explore alternative or income-oriented repayment options if needed.
If there is an extension, it is possible that borrowers will see relief for a few more months. Regardless of the time, borrowers will hear from their service providers prior to repayment.
2. The University of South Carolina is writing off $ 9.8 million in student loan debt.
On July 17, South Carolina State University announced that students financially affected by the COVID-19 pandemic will be forgiven nearly $ 10 million in institutional student loan debt. Alexander Conyers, in his first executive decision as acting president of the university, said in a statement: “No student should stay at home because he cannot afford to pay off his overdue debt after experiencing the financial devastation caused by the global pandemic. … “
The university is using COVID-19 relief funds provided by the federal government through the CARES Act and the American Rescue Plan to save more than 2,500 students. Most of these students were previously registered, but could not continue their studies due to arrears. Forgiven debt is loans taken through a university and not through the federal government or private lenders.
How does it affect student loans
South Carolina State University is one of many colleges that have used CARES and American Rescue Plan funds to pay off their students’ institutional debt. Some of the funding allocated to universities to tackle the pandemic was dedicated to helping students in difficulty, which means that more students will see financial aid in the coming months.
Whether you are new to obtaining student loans or in the process of paying off, it is wise to know how student loan rates can change. As 2021 progresses, more opportunities may open up for cheaper loans or loan forgiveness; follow up Student Bank Loan News Center for the latest trends.