Student loans are back in the spotlight following the sudden extension of the eviction moratorium.
Here’s what you need to know.
Left today, back tomorrow. The eviction moratorium, which temporarily prevented landlords from evicting expired tenants due to the Covid-19 pandemic, expired on July 31, 2021, with no action from Congress. With the lifting of the federal moratorium on evictions, a logical conclusion can be drawn for the millions of student loan borrowers waiting in limbo: Like the moratorium on evictions, the student loan exemption will expire on September 30, 2021 without any formal extension.… The argument is this: With the expiration of the eviction moratorium, tenants will be left without this federal protection and could lose their home. Likewise, with the planned expiration of the student loan relief, Effective October 1, millions of student loan borrowers will face the following::
- federal student loan payments will resume;
- federal student loan interest rates, which temporarily stood at 0%, will return to their usual pre-pandemic interest rates; and
- student loan collection may resume in the event of default, which may include, for example, withholding wages.
As Senator Elizabeth Warren (D-MA) and others have argued, failing to meet student loan benefits will lead to financial disaster, including student loan default and student loan delinquencies. Warren also said Student Loan Services Unprepared for Student Loan Borrowers to Pay Student Loans Again… Warren and others are pushing for the extension of student loan exemptions until at least March 31, 2022. However, the end of the eviction moratorium appears to have been a precursor to what will happen to student loan benefits next month.
Then the eviction moratorium was suddenly extended – after its expiration…
Student Loans: What Happened to the Eviction Moratorium and Why It Matters
The Centers for Disease Control and Prevention (CDC) imposed a federal eviction moratorium last year and was expected to expire on December 31, 2020. However, Congress extended the eviction moratorium until January 31, 2020, and then the CDC extended the eviction deadline. three times thereafter, the moratorium. Like the moratorium on evictions, the student loan exemption was expected to be temporary. The Cares Act – a $ 2.2 trillion stimulus package – only allowed suspension of student loan payments and other student loan exemptions from March 2020 to September 30, 2020. However, President Donald Trump has extended this student loan exemption twice: first from September 30, 2020 to December 31, 2020, and then from January 1, 2021 to January 31, 2021. When Biden became president in January, Biden extended the student loan exemption for eight months until September 30, 2021.
With the expiration of the eviction moratorium approaching on July 31, several members of Congress have lobbied for an extension of the eviction moratorium, which they argued will provide economic support to Americans facing financial difficulties due to the Covid-19 pandemic. Members of Congress argued the same in favor of extending student loan benefits. Biden also called on Congress to extend the eviction moratorium.but didn’t do it three days before the expiration date… Congressional Democrats have struggled to drum up support for an extension, but have failed to convince moderate and conservative Democrats.
Student Loan Benefit: New Hope That Student Loan Payments Will Be Delayed Again
What was the reason for lifting the moratorium on evictions? One reason may have been prolonged protests from several members of Congress, such as Rep. Corey Bush (Democracy), who continued to pressure the Biden administration to extend the eviction moratorium. After the deadline expired on Friday, the CDC extended the Tuesday moratorium by two months until October 3. The renewal will only apply to US counties with significant or high transmission rates of Covid-19. The short-term renewal is intended to give tenants more time to obtain existing financial assistance from federal stimulus funds. Curiously, the CDC extended the eviction moratorium – however not in substance – but given that the Biden administration has expressed doubts about the legal ability of the CDC to extend the relief. In June, the US Supreme Court ruled 5-4 not to lift the eviction moratorium. However, Judge Brett Cavanaugh wrote a concurrent opinion in which he stated that he voted not to lift the moratorium as it expires on July 31. Cavanaugh wrote that Congress would have to pass new legislation to extend the federal moratorium on evictions beyond July 31. The CDC disagreed with Cavanaugh’s opinion and still extended the deadline to two months.
Could Extending the Eviction Moratorium Become an Incentive to Extend Student Loan Benefits? Yes. Like a moratorium on evictions, progressive members of Congress can step up political pressure on Biden to expand. If Biden Extends Student Loan Benefit Here Are 5 Options… Warren, Senate Majority Leader Chuck Schumer (New York State), and others pressured Biden for a student loan exemption and student loan cancellation… This win over a moratorium on evictions could be a watershed moment for progressive supporters to pressure the president to extend the student loan exemption on the same basis.
Will Biden Extend Student Loan Benefit?
This Hidden Clue Suggests Biden Won’t Renew Student Loan Benefit… However, an extension of the moratorium on evictions could set the stage for a change in that provision if there is momentum for continued federal financial support in the wake of the Covid-19 pandemic. Unlike the moratorium on evictions, Biden did not call on Congress to extend the student loan exemption beyond September 30. One reason may be that he has executive authority to extend student loan benefits and therefore does not need congressional approval. For example, once this year, he extended his student loan exemption. The question is whether he wants to extend the student loan exemption, whether he considers it necessary in light of the Covid-19 pandemic, and whether he will extend the exemption. There are also political questions regarding any extension of student loan benefits. The Biden administration is grappling with the Covid-19 pandemic but also claims the economic recovery is well under way. The rationale for extending the student loan benefit will be related to specifically in relation to the Covid-19 pandemic, not general injustice or high debt burden of student loans. This creates a problem with optics: if the student loan exemption is extended, it could mean for some observers that the economy is not strong enough so that millions of student loan borrowers can pay their monthly student loan payments. The counter-argument is that the economy and unemployment can still recover, but student loan borrowers are not ready to resume their student loan payments after an 18-month grace period. For example, a recent survey found that 90% of student loan borrowers are not willing to pay on student loan from October 1… At the same time, “not prepared” can mean “not prepared financially,” but it can also mean “not prepared psychologically,” or both.
Biden may announce an extension of student loan benefits, but there are no guarantees. The student loan exemption currently ends on September 30th. Make sure you are ready to pay off your student loan. Evaluate all possible options and make the right financial decision for your unique personal situation. Here are some popular ways to save money on student loans: