Here is a list of those who want President Joe Biden to defer student loan payments after September 30, 2021.
Here’s what you need to know – and what it means for your student loans.
In the absence of an extension, federal student loan payments will be repayable again starting October 1. Your normal interest rate will also be restored, and collection of any student loans not defaulted will resume. Tens of millions of student loan borrowers have received a temporary suspension of student loan payments – including a suspension of payments on federal student loans and no interest – since March 2020. However, a chorus of student loan supporters argue that resuming student loan payments will hurt student loan borrowers and lead to financial disaster, including student loan defaults. Here is a partial list of those who want Biden to defer student loans:
1. Suspend Student Loans: Progressive Members of Congress
In June, 64 progressive members of Congress, including Senator Elizabeth Warren, Massachusetts and Senate Majority Leader Chuck Schumer, New York, wrote letter on Biden, urging him to suspend student loans and freeze interest on student loans until March 31, 2021, or until the economy reaches employment levels before the pandemic, whichever is longer. Members of Congress wrote that resuming student loan payments would hurt the economy, cause financial hardship for student loan borrowers, and lead to student loan default. “President Biden should cancel student debt, but in the meantime, he should extend the pause in payments so that borrowers do not get hurt,” Warren said.
2. Student Loan Benefit: Presidents of the Senate and Home Education Committee.
Senator Patti Murray (Democracy) and Rep. Bobby Scott (Democracy), who chair the Senate and House Education Committees, respectively, wrote Biden to persuade him to continue his “limited period” student loan benefits until early 2022. Murray and Scott wrote that the Department of Education needs time to “conduct the necessary awareness campaign” with student loan borrowers so that they are aware of their “upcoming commitments” AND give them enough time before their student loans are due. “While the economy has begun to show promising signs of recovery,” lawmakers wrote, “more than nine million Americans are out of work, and the economic and health imbalances caused by the pandemic are serious.”
3. Deferral of student loan payments: Department of Education staff
According to Politico, some U.S. Department of Education officials called on Biden defer student loan payments after September 30… They asked the president to suspend student loan payments until January 31, 2022. US Education Secretary Miguel Cardona has not publicly announced whether he supports extending the pause in student loan payments. “We’re looking at it,” Cardona said in May. “Obviously, we’re going to be guided by what the data tells us and where we are as a country in regards to pandemic recovery. It is possible, but at the moment [the payment pause will end] September 30th “. Cardona told Senators on Capitol Hill last month that there was ongoing talk of extending the pause in payments, although no decision had been made.
4. Student Loans: 128 advocacy groups first want to cancel a student loan.
A group of leading human rights organizations sent letter Biden, urging him not to start paying student loans until the Biden administration fixes student loan repayment and cancels student loan debt… The 128 organizations include the American Civil Liberties Union (ACLU), Service Workers International Union (SEIU), Student Borrower Protection Center (SBPC) and others. “Before the outbreak of the pandemic, tens of millions of borrowers struggled to navigate a badly broken student loan system,” the organizations write. “America’s student debt crisis has wreaked havoc on the financial lives of families across the country, despite payment relief and debt relief programs that promised these debts would never be a lifelong burden. Your administration now has a unique opportunity to repair the damage caused by federal and state political mistakes, as well as decades of government mismanagement and industry abuse – an opportunity and a commitment that must be met before any action is taken. resume monthly student loan payments ”.
Will Biden Extend Student Loan Benefit?
Biden did not announce a decision to extend the student loan exemption beyond September 30. Reasons for renewal include: to help student loan borrowers in financial difficulties prevent potential student loan delinquency or default on student loan, and to give student loan borrowers more time to prepare to move on to pay off the student loan. According to a new poll, 90% of student loan borrowers are not willing to pay student loan again from October 1… The reasons for not renewing are mainly related to costs and economic recovery. Opponents of extending student loan exemptions say that student loan borrowers have not received student loan payments for 18 months and received Cancellation of over $ 90 billion student loan… Biden could extend student loan exemption after September 30, but there is one major dilemma… On the one hand, the Biden administration says the economy is strong and recovering. However, on the other hand, if the 40 million student loan borrowers suddenly need more time to pay off their student loans due to financial problems, it will be an ambiguous signal. In addition, the federal government is lifting higher unemployment benefits and a moratorium on evictions, two other important financial aid measures. Opponents also ask if the two programs are ending, why the Biden administration extended the student loan exemption.
Remember that even if the student loan deferral is extended, it is only temporary. The time will come when you have to pay off your student loans and your normal interest rate will recover. Do not wait for student loan payments to resume to take control of your student loan debt. To start saving, consider the following student loan repayment options: