WTF continues to provide federal student loan assistance?

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Since the federal student loan grace period expires in October, most borrowers will have to start paying off their student loans for the first time since March 2020 – if that deadline can be met. But will the moratorium be extended again? Here is the latest news on student loan forgiveness.

Will there be a student loan patience will be renewed in October?

Chances of an extension of the grace period enhancedthough there is no guarantee that this will happen. As reported by Politico, U.S. Department of Education officials are recommending that the White House extend the moratorium until January 2022, although this position has not yet been publicly announced.

And last week, Democratic Senators Elizabeth Warren and Edward J. Marke sent letter to President Biden with a call to extend the moratorium at least until March 31, 2022. The letter points to ongoing problems with service companies – as service companies say they are still understaffed – along with ongoing financial hardships for borrowers, citing June poll in which 90% of respondents said they were not ready to resume loan payments in October.

Also recently announced was the withdrawal of service companies Granite State and FedLoan from the federal student loan program effective January 1, 2022, affecting approximately 10 million borrowers. As Forbes notes, the Department of Education contractor translation service has historically been chaotic, with widespread problems including lost records and missed payments. Moving the moratorium to the end of the year will give maintenance personnel more time to prepare.

What about student loan forgiveness?

Biden waiting for a note from the Ministry of Education on the legality of the president’s forgiveness of student loan debt through the executive branch. While Progressive Democrats claim that Biden can write off student debt of up to $ 50,000 “with a stroke of the pen,” the legality of such a move Isn’t that so?

Plus, debt forgiveness is a much more controversial issue that is unlikely to get through Congress unless the pirate is eliminated. Critics of blanket debt They are relieved that this is unfair to people who do not go to college, that it is not about rising tuition fees, and that any forgiveness should be more targeted at people on lower incomes.

Meanwhile, President Biden canceled $ 3 billion student loan debt by strengthening existing loan assistance programs through executive actions. Department of Education additional reforms this should make it easier for problem borrowers to qualify for student debt relief, but it will likely take them up to a year to complete.

Bottom line

While an extension seems more likely than a debt write-off, borrowers should prepare for regular scheduled payments starting in October just in case. If you are unable to make these payments, consider applying for a income-driven repayment plan

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