Biden administration extends student loan repayment break
In a statement, President Biden said current employment figures show that “we have the tools that will allow us to beat Covid-19 and keep our economy recovering at an all-time high.” But he added: “We know there is still work to be done, and there will still be a long way to go for many people – especially one in six adults and one in three young people who have federal student loans.”
Notably, the Education Department stressed that January was a “definitive end date” – it will be the fourth extension since the start of the pandemic – as the Biden administration faces increasing pressure from Democrats to clear up. ‘to $ 50,000 in federal student loan debt.
An official familiar with the ministry’s plans said the January expiration date was based on financial aid cycles and delinquency patterns, and the focus on its purpose was to give borrowers more certainty. than continuous extensions provided. The department is also preparing for the departure of major loan managers – including the Pennsylvania Higher Education Assistance Agency, known as PHEAA, which manages millions of accounts – and will use the four months to make the transition.
The announcement drew cheers from advocates for student borrowers.
Persis Yu, director of the National Consumer Law Center’s Student Loan Assistance Project, said there were “too many moving parts to successfully start paying federal student loans,” citing the reshuffle of ready.
“Borrowers collectively breathe a huge sigh of relief at the news that the federal student loan payment hiatus has been extended once again,” Ms. Yu said in a statement. “The student loan system is not ready to resume repayment on October 1 and President Biden has made the right decision to postpone repayment.”
The extension is likely to amplify calls for the Biden administration to write off student loan debt outright.
In a joint statement, Senator Chuck Schumer of New York, Majority Leader Senator Elizabeth Warren of Massachusetts and Representative Ayanna Pressley of Massachusetts – all Democrats who urged Mr Biden to write off student loan debt by executive order – said the hiatus “has brought tremendous relief to millions of borrowers facing a dire financial cliff” but no did not go far enough.
“Our broken student loan system continues to exacerbate racial wealth gaps and dampen our entire economy,” the statement said. “Canceling student debt is one of the most important steps President Biden can take right now to build a fairer economy and tackle racial inequality. We look forward to hearing the administration’s next steps in addressing the student debt crisis.