Student Loan Borrowers May Receive Longer Time Before Payments Resume

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For over a year, borrowers have not had to make payments on their federal student loans.

This break is currently scheduled to end in September.

However, US Education Secretary Miguel Cardona said The Senate Appropriations Committee said this month that it was engaged in discussions about whether this was the best time to resume payments. And in May at a conference of the Association of Writers and Educators, Cardona said that the question of extending the pause in payments was already on the table.

The White House is under increasing pressure to give borrowers more time.

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Senator Elizabeth Warren, Massachusetts, and Senate Majority Leader Chuck Schumer, New York, sent a letter President Joe Biden this month, urging him to extend the payout gap until March 2022. This would mean that most borrowers would not pay off their student loans in two years.

More than 120 organizationsincluding the American Civil Liberties Union, the National Consumer Advocacy Center and the Consumer Federation of America also recently wrote to the president asking for an extension of the pause in payments until the student debt is canceled.

“Your administration now has a one-generation chance to repair the damage done 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- or measures taken to resume monthly student loan payments, ”they wrote.

There are more than 44 million student loan borrowers in the United States, and the national outstanding balance is expected to exceed $ 2 trillion by 2022. The average student loan balance is about $ 30,000, up from $ 10,000 in the early 1990s. with many borrowers $ 100,000 in debt or more

The average bill is $ 400 a month, and research has shown that such payments make life harder for people. save for your future, start business as well as create families

Most student loan borrowers accepted the government’s proposal to suspend payments. According to the latest data analyzed by a higher education expert, about 11% of borrowers are in repayment. Mark Kantrowitz

Before Covid, borrowers struggled with more than 1 in 4 in delay or default… After more than a year of record high unemployment, this pain has only intensified. Congressional Budget Office recently predicted that the unemployment rate among young workers would improve more slowly than the general rate.

“Most likely, the pause in payments and the waiver of interest will be extended if the unemployment rate for college graduates has not yet returned to normal as of September 30, 2021,” said Kantrowitz.

The unemployment rate for those with an associate degree stood at over 5% in May, up from 2.8% before the pandemic.

About 3% of bachelor’s degree recipients are unemployed, up from 2.2% before Covid.

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