Here’s a list of who wants President Joe Biden to postpone student loan payments beyond September 30, 2021.
Here’s what you need to know — and what it means for your student loans.
Absent an extension, your federal student loan payments will be due again starting October 1. Your regular interest rate will also resume, and collection of any student loans in default will restart. Tens of millions student loan borrowers have received temporary student loan forbearance — including a pause on federal student loan payments and no interest — since March 2020. However, a chorus of student loan advocates say restarting student loan payments will hurt student loan borrowers and result in financial disaster, including student loan default. If student loans aren’t paused again, it’s possible that these 4 things could happen. Here’s a partial list of who wants Biden to postpone student loans:
1. Pause student loans: progressive members of Congress
In June, 64 progressive members of Congress — including Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) wrote a letter to Biden urging him to pause student loans and freeze student loan interest until March 31, 2021 or until the economy reaches pre-pandemic employment levels, whichever is longer. The members of Congress wrote that restarting student loan payments will hurt the economy, cause financial distress for student loan borrowers, and result in student loan default. “President Biden should cancel student debt, but in the meantime he should extend the payment pause so that borrowers aren’t hurt,” Warren said.
2. Student loan relief: Chairs of Senate and House Education committeess
Sen. Pattty Murray (D-WA) and Rep. Bobby Scott (D-VA), who chair the Senate and House committees on education, respectively, wrote Biden to urge him to continue student loan relief “for a limited period” until early 2022. Murray and Scott wrote that the Education Department needs time to “conduct a necessary outreach campaign” to student loan borrowers so they are aware of their “upcoming obligation” and provide them with sufficient time before their student loan payments are due. “While the economy has begun to show promising signs of recovery,” the legislators wrote, “more than nine million Americans remain out of work, and the economic and health disparities created by the pandemic are severe.”
3. Postpone student loan payments: Education Department officials
According to Politico, some officials at the U.S. Department of Education have urged Biden postpone student loan payments beyond September 30. They have asked the president to pause student loan payments through January 31, 2022. U.S. Secretary of Education Miguel Cardona hasn’t publicly stated whether he supports extending the student loan payment pause. “We’re looking at it,” Cardona said in May. “Obviously we are going to take lead from what the data is telling us and where we are as a country with regards to the recovery of the pandemic. It’s not out of the question, but at this point, [the payment pause will end] September 30.” Last month, Cardona told senators on Capitol Hill that conversations were ongoing regarding the possibility of extending the payment pause, although no decision has been made.
4. Student loans: 128 advocacy groups want student loan cancellation first
A group of leading advocacy organizations sent a letter to Biden urging him not start student loan payments until the Biden administration fixes student loan repayment and cancels student loan debt. The 128 organization include American Civil Liberties Union (ACLU), Service Employees International Union (SEIU), the Student Borrower Protection Center (SBPC), among others. “Before the pandemic struck, tens of millions of borrowers struggled to navigate a badly broken student loan system,” the organizations wrote. “America’s student debt crisis wreaked havoc on the financial lives of families across the country, despite payment relief and debt forgiveness programs that promised that these debts would never be a life-long burden. Your administration now has a once-in-a-generation chance to repair the damage caused by policy failures at the federal and state level and decades of government mismanagement and industry abuses — an opportunity and an obligation that must be fulfilled before any action is taken to resume monthly student loan payments.”
Will Biden extend this student loan relief?
Biden hasn’t announced a decision whether to extend student loan relief beyond September 30. If Biden extends student loan relief, there are several options. Reasons to extend include: help student loan borrowers who are struggling financially, prevent potential student loan delinquency or student loan default, and give student loan borrowers more time to prepare for the transition to student loan repayment. According to a new survey, 90% of student loan borrowers are not ready to pay student loans again starting October 1. Reasons not to extend are primarily related to cost and the economic recovery. Opponents to extending student loan relief say that student loan borrowers will have had 18 months of no student loan payments and received more than $90 billion of student loan cancellation. Biden could extend student loan relief beyond September 30, but there’s one major dilemma. One one hand, the Biden administration says the economy is strong and recovering. However, on the other, if 40 million student loan borrowers suddenly need more time to pay student loans due to financial struggle, it sends a mixed message. Moreover, the federal government is ending enhanced unemployment benefits and the eviction moratorium, two other essential financial relief efforts. Opponents also ask if these two programs are ending, why the Biden administration would extend student loan relief.
Remember that even if student loan forbearance is extended, it’s only temporary. There will come a time when you have to pay your student loans and your regular interest rate will resume. Don’t wait for student loan payments to resume to take control of your student loan debt. Consider these student loan repayment options to start saving money: