President Joe Biden (Photo by Jenny Anderson/WireImage)
Student loan payments may be delayed beyond September 30, even if unemployment benefits and the eviction moratorium are ending.
Here’s what you need to know.
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Student Loans
Student loan borrowers, Sen. Elizabeth Warren (D-MA) and now some members of the U.S. Department of Education are all lobbying President Joe Biden to extend student loan relief beyond September 30, 2021. Currently, the following student loan relief is set to expire on that date:
- no federal student loan payments;
- 0% interest on federal student loans; and
- no collection of student loan debt in default, including garnishment of wages.
Some have called to extend this temporary student loan relief until March 31, 2022. Others have said to postpone student loan payments until the “end of the Covid-19 pandemic,” without specifying a specific date or how “the end” is determined. Others are hoping for an extension of any kind, even for a month or until year end. If student loans aren’t paused again, some say these 4 things will happen.
However, there is no guarantee that this temporary student loan forbearance will be extended. At the same time, the federal government is ending two popular financial relief programs during the Covid-19 pandemic. Enhanced unemployment insurance will end this summer and won’t be renewed. Similary, the federal eviction moratorium from the Center for Disease Control (CDC) will end July 31, 2021 and won’t be renewed. (That said, there may be some similar relief programs available at the state and local levels). So, what about student loan relief? Can the president continue student loan relief even if these unemployment benefits and the eviction moratorium are ending? Yes, but there are political and policy implications. Here are pros and cons for Biden to extend student loan relief beyond September 30:
Student loans: supporters say extend student loan relief
Supporters of extending student loan relief beyond September 30 cite several reasons, including:
- The Covid-19 pandemic isn’t over;
- Millions of student loan borrowers are struggling financially to pay student loans;
- The economy hasn’t recovered from the impact of the Covid-19;
- 90% of student loan borrowers aren’t ready to start making student loan payments again;
- Student loan payments disproportionately will hurt people of color and student loan borrowers with lower income or who are unemployed; and
- Resuming student loan payments will hurt the economy, since student loan borrowers who must pay student loans again won’t have enough money to spend in their local economy.
Student loans: opponents say end student loan relief
Opponents of extending student loan relief beyond September 30 cite several reasons, including:
- Pausing student loan payments means taxpayers are bearing the cost for student loan borrowers;
- Student loan borrowers got temporary student loan forbearance since March 20 for a total of approximately 18 months;
- Student loan borrowers will have received more than $90 billion in student loan cancellation through September 30;
- The Biden administration says the economy is recovering, and it would be a mixed message to now say that the economy is so bad that student loan borrowers need even more time to pay student loans;
- Enhanced unemployment insurance and the eviction moratorium are ending. Why should student loan borrowers get relief when other essential relief is ending?
- There’s apparently no distinction between student loan borrowers who can afford to pay their student loans after September 30 and those who cannot, making any possible extension unfair and inefficient.
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Student loans: final thoughts
There has been no final decision about whether to extend student loan relief beyond September 30. If Biden extends student loan relief, there are several options. If there is no extension, the Education Department will notify you about student loan payments for federal student loans starting October 1, 2021. This temporary forbearance discussion is separate from the ongoing discussion about student loan cancellation. Biden has now cancelled $3 billion of student loans since becoming president. This includes $1.5 billion of student loans that Biden has cancelled this way. Biden has continued to cancel student loans on a targeted basis, and will continue to do so. In case there is no extension, contact your student loan servicer to update your autopay and bank account information, if necessary, as well as to check your student loan balance and interest rate. Also make sure you evaluate your options for student loan repayment so you can start saving money:
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