Biden may extend student loan suspension beyond September 30 – though it can be an uphill battle
President Joe Biden may suspend student loans beyond September 30, although it can be an uphill battle.
Here’s what you need to know – and what it means for your student loans.
At an Education Writers Association conference on Monday, US Secretary of Education Miguel Cardona said it was possible for Biden to suspend federal student loan payments beyond September 30, 2021. Here is the ‘exchange, like sharing on Twitter by Politico:
When asked if federal student loan payments and accrued interest would resume on October 1, 2021 or be suspended beyond that date, Cardona replied: “We are looking at it. Obviously, we’re going to be inspired by what the data tells us and where we are as a country in terms of the resumption of the pandemic. It’s not out of the question, but at this point it’s September 30th. “
What this means for student loan borrowers
On day one of his tenure, Biden took executive action on student loans, including suspending federal student loan payments and interest accrual until September 30, 2021. This extended the benefits of student loans. that Congress passed under the Cares Act, the $ 2.2 trillion stimulus package, as well as executive action taken by President Donald Trump. The Department of Education reported that these student loan actions collectively saved student borrowers $ 5 billion per month by not having to pay interest on their federal student loans during the Covid pandemic. 19. If this temporary student loan forbearance expires on September 30, 2021, student borrowers will save another $ 25 billion.
Based on Cardona’s comments, it looks like Biden will be data-driven as he shapes his take on student loans and student loan cancellation. Cardona says Biden will assess the data, which likely means economic data as well as data on the Covid-19 pandemic, to determine whether the pause on student loan payments should be extended. Above all, Cardona says that from now on, the student loan payment and the interest break will end on September 30, 2021. Of course, it’s possible Biden could expand beyond that date, but it looks like it would be an uphill battle based on the ‘it’s not out of the question’ claim. That said, Cardona also hinted that the Biden administration will assess the data closer to September 30 to get an overall assessment of the economic recovery and the state of the Covid-19 pandemic. Cardona also noted that communicating with student loan borrowers before September 30 will be key to ensuring a smooth transition, if the payment break is not extended.
How it relates to student loan cancellation
There is no direct connection between the pause on federal student loan repayments and the cancellation of large-scale student loans. For example, Biden could sue any combination of student loan cancellation and ending or extending the payment break. Biden has asked the Department of Education to analyze its legal authority to unilaterally enact a large-scale student loan cancellation without further authorization from Congress. This report, according to White House chief of staff Ron Klain, is due in a few weeks. Biden wants his student loan canceled in three ways. He supports the cancellation of student loans of $ 10,000, but wants Congress to pass a law canceling student loans. Since becoming president, Biden has also canceled $ 2.3 billion in student loans. The Education Department’s findings and recommendations could ultimately help determine whether Biden is canceling student loans or looking to Congress for action.
If the break on student loan payments is not extended, that means your federal student loan payments will be due from October 1, 2021. Even though Biden extends the break on federal student loan payments, the break will not be due. will not be permanent. That’s why it’s important to consider these other potential options for saving money and getting a student loan repayment game plan: