Student loan holders receive partial assistance from the Biden administration



The Biden administration is considering extending the freeze on student loan payments for the period of the pandemic beyond the planned deadline in September and moving to partial measures to reduce their student debt bills.

Five months later, President Biden resisted calls from fellow Democrats and activists to write off much of America’s $ 1.6 trillion federal student loan debt in one fell swoop through executive action. It is unlikely that Congress will pull this off because Democrats lack the Republican support they need to take such a measure.

However, many Americans are actually seeing a reduction in their debt obligations due to policy changes that began under the Trump administration, which froze student loan payments when the pandemic began to unfold in March 2020. The move, which the Biden administration has extended until September, has effectively written off tens of billions of dollars in student debt that families would otherwise have paid, largely through waiving interest charges.

Mr Biden’s secretary for education, Miguel Cardona, told a group of congressmen last month that the administration is considering extending the payment freeze beyond September. When asked to comment on this opportunity, an administration spokesman said Mr. Biden “continues to explore what debt relief measures can be taken administratively.” The official reaffirmed Mr Biden’s desire for Congress to pass legislation to write off student debt of $ 10,000 to each federal borrower. Administration lawyers are examining whether the president has the authority to cancel the debt through executive action, the official said.

Last month Department of Education canceled $ 500 million student debt is due to thousands of former students of the defunct ITT Institute of Technology who have been accused by federal regulators of ineffective financial management and fraudulent recruitment tactics. The department said it will move on to adjust federal rules later this year to allow more disadvantaged borrowers who have attended other commercial schools to receive debt forgiveness.


Source link