Student loan suspension extended until January – Greeley Tribune

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On Friday, the Biden administration announced that federal student loan payments would be suspended until January 2022, extending a pause that began at the start of the pandemic and was due to expire next month. The Education Department said this would be the last extension.

Borrowers will not have to pay federal student loans during the moratorium, interest rates will be set at 0%, and debt collection efforts will remain on hold. The suspension will expire on January 31, 2022.

Education Minister Miguel Cardona said this should give borrowers enough time to prepare to resume payments.

“As our country’s economy continues to recover from a deep pit, this final expansion will give students and borrowers the time they need to plan a restart and provide a smooth return path to repayment,” Cardona said in a statement.

The Trump administration suspended federal student loan payments in March 2020 and then extended them until January 2021. Shortly after taking office, President Joe Biden extended the hiatus until September 30.

But even as the economy recovers, there were fears that borrowers would not be willing to continue paying so soon. Democrats, including Senate Majority Leader Chuck Schumer, New York, and Senator Elizabeth Warren, Massachusetts, recently demanded that Biden extend the moratorium until at least March 2022.

Schumer, Warren and Rep. Ayanna Pressley, Massachusetts, welcomed the extension in a joint statement Friday, saying it provides relief to millions of borrowers facing a “catastrophic financial crisis.”

“The pause in payments has saved the average borrower hundreds of dollars a month, allowing them to invest in their future and support the needs of their families,” the Democrats said.

The Department of Education itself has expressed concern about the administrative hurdles associated with the sudden resumption of loan repayments. In a November 2020 report, the ministry said this would be a “heavy burden” for the government and credit institutions.

In its announcement Friday, the Department of Education said the final renewal allows ample time for payments to resume smoothly.

The expansion drew criticism from Conservatives, including Rep. Virginia Fox, the top Republican on the House Education and Labor Committee.

“I regret that Secretary of State Cardona did not show real leadership in working with Congress to responsibly transfer the portfolio to return by October 1 this year,” Fox said in a statement. “This is nothing more than a misdemeanor.”

The Biden administration has announced relief as some Democrats pressure it to write off huge amounts of student debt. Schumer and Warren called on Biden to use their powers to write off a $ 50,000 student debt for all borrowers, saying it would boost the economy and help families hit hard by the pandemic.

But Biden doubted whether he was eligible for such a massive cancellation, and asked the Department of Education and Justice to look into the matter. The president has supported canceling students up to $ 10,000, but Biden says Congress should do so.

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