The Biden administration seems increasingly inclined to extend the student loan deadline, which currently ends in 22 days. Meanwhile, Congressional Republicans have introduced a bill to end student loan forgiveness and restart payments for millions of borrowers.
This is the latest.
Biden may extend student loans term to end of 2022 or next year
Under the CARES Act, passed by Congress in the early months of the coronavirus pandemic, payments on federal student loans held by the government have been suspended since March 2020. The legislation also suspends accrued interest on federal student loans held by the government and halts collection activities for delinquent borrowers.
Congress initially mandated a six-month moratorium on student loans payments when it passed the legislation, but Presidents Trump and Biden have extended that relief several times, often at the last minute. August 31 is the deadline for student loans to expire.
As Americans continue to deal with historically high inflation, it seems increasingly likely that the Biden administration will extend the student loan hiatus once again. Last month, the administration notified student loan servicers, which contract with the U.S. Department of Education, to delay sending reminders to borrowers, a clear sign that officials did not expect short-term payments from borrowers. Senior Education Department and White House officials, including the secretary of education, have emphasized in recent months that borrowers receive several reminders before student loan payments resume.
Recent reports suggest that Biden is considering an extension until at least the end of 2022 and possibly until the summer of 2023. It is worth noting that July 1, 2023 will be a critical date for student loan borrowers, as a review of major federal loan repayment and forgiveness programs will occur at that time. The Department of Education released new rules governing the review last month, and details about the new income-based repayment scheme may be released within weeks.
Republicans introduce bill to end student loan disruptions
The REAL reform bill would also include other student loan reforms that may be welcomed by borrowers, including simplifying income-based repayment plans, limiting accrued interest, and providing greater flexibility for the use of PELL grants, which students do not have to pay back.
“The Biden administration has been carrying out massive student loan forgiveness on the backs of Americans without congressional authorization,” Representatives Virginia Fox, Elise Stefanik and Jim Banks said in a joint statement Say. The delegates argued that the ongoing student loan moratorium has resulted in “a de facto loan forgiveness of at least $5,500 per borrower” in the form of repayment and interest suspensions.
“Rather than place the burden of this broken student loan system on the shoulders of American taxpayers, we proposed this bill to fix the system,” they said.
What’s next for student loan disruption and forgiveness of other student loans
Republican bills have little or no chance of passing in the House or Senate, where Democrats hold a narrow majority. Another extension of student loan terms will be welcomed by voters, polls show. Only one-third of respondents to a Morning Consult/Politico poll in March would oppose an extension. Extending student loan terms appears to be particularly popular among younger voters, with 56 percent of respondents between the ages of 18 and 34 agreeing.
Biden could announce a new extension of the moratorium on student loan payments any day. Biden has also said that he will make a final decision on whether to approve a broad student loans forgiveness by the end of August.
Delta Skymiles® Reserve American Express Card Review – See more.
AmEx focuses on customer experience with new checking account and redesigned application