There’s Still Time to Extend the Student Loan Repayment Pause

William Potter/Getty Images

For the latest news and information on the coronavirus pandemic, visit WHO and CDC Web pages.

President Joe Bidens budget proposal for fiscal year 2023, which was published earlier this week, are not included cancellation of student loan or an extension of the grace period. With a month to go before federal student loan payments resume, student debt relief looks unlikely — but there’s still time to extend the student loan moratorium.

Biden’s $5.8 trillion budget proposal includes $2.7 billion for the Department of Education’s Office of Federal Student Aid (up 43% year over year) to “better serve student loan borrowers.” support,” according to the budget.

“Specifically, the increase in FSA will enable it to improve customer service in student loan administration and ensure the successful transition from the current short-term loan servicing contracts to a more stable long-term contract and service environment,” outlines the budget proposal.

In addition, the budget proposal doubles the maximum Pell Grant award and increases funding by $752 million for historically black colleges, tribal-controlled colleges and minority-served institutions.

And that’s it. The budget proposal makes no mention of extending the student loan deferral program or canceling student debt. But with a month until payments resume, there’s a chance the pause will be extended – and there are important clues pointing in that direction.

What you should know about the federal student loan repayment pause

Student debt repayments have been suspended since March 2020 and are currently scheduled to resume on May 1, 2022. On March 3, White House Chief of Staff Ron Klain called that Biden would decide whether to forgive student debt before the end of the hiatus or, alternatively, extend the hiatus. The following week, officials at the Department of Education began ordering companies that administer government student loans to suspend sending notices of payment resumption, as first reported by Politically.

During the campaign, Biden said he would support legislation calling in federal loans of at least $10,000 per borrower. However, the White House has been largely silent since Biden took office, although the Department of Education has taken steps on that front in recent months.

After the transformation of the Ministry of its Public Sector Loan Forgiveness Program In October 2021, 70,000 borrowers had their student loans wiped out, which collectively reached nearly $5 billion in January. The ministry then announced in March that about 30,000 more people were deemed eligible under the government loan forgiveness waiver.

Whether Biden has the legal authority to unilaterally cancel student debt through executive action without congressional legislation is still unclear. The Ministry of Education published a note (PDF) on the subject last year, but the heavily redacted document offers little information for the public.

Federal student debt repayments have been suspended for almost two years. Since the pause was first introduced, no interest has been accrued and collection of defaulted receivables has been suspended.

Former President Donald Trump first enacted the student loan pause in March 2020 and extended it through January 2021. biden extended the break two more times after taking office, with his government warning that the January extension would be the last.

However, as the Omicron variant of COVID-19 swept through the US last year, Biden’s administration decided to further extend the moratorium on student loan repayments until May 2022.

Millions of student loan borrowers “need some time before they start making payments again,” it said Biden’s 2021 statement.

Biden also urged student loan borrowers to “do their part” and “make full use of the Department of Education’s resources to assist you in preparing for payments to resume; explore options to lower your payments through income-based repayment plans; explore public service loan forgiveness; and make sure you are vaccinated and refreshed if eligible.”

There’s Still Time to Extend the Student Loan Repayment Pause Source link There’s Still Time to Extend the Student Loan Repayment Pause

Related Articles

Back to top button