Biden Administration paused student loans throughout the coronavirus pandemic. The federal government allows millions of student loan payments to be halted, but in a few short months, the repayments will return. Over 200 organizations are urging the President for an extension.
Continue Halting the Student Loans
The student loans paused took effect last March 2020, however, the COVID-19 emergency relief for federal student loans ends effectively by Jan. 31, 2022, students will immediately resume the loan repayments for millions of Americans.
In a letter that was spearheaded by the Student Borrower Protection Center and delivered to Biden on Wednesday, it argues the president that the COVID-19 pandemic is still ongoing to devastate not only Americans’ health but as well as financial security. In the letter that was sent to Biden, it cited that the US Department of Education’s data stating, that the borrowers are saving around $5 billion per month from the short-term zero percent interest rate.”
Furthermore, Under the CARES Act, both President Biden and former President Trump extended the student loan payment moratorium that pauses by the federal student loan repayments while also automatically setting interest rates to zero.
President Campaign Promises
The Advocators reminded Biden’s presidential campaign promises to fix the “broken” student loan system and to cancel the federal student loan debt. They cited out that the Department of Education accept it and had a backlog of 175,000 applications for Public Service Loan understanding and another backlog of more than 128,000 applications for Borrower Defense discharges.
Furthermore, the content of the letter said “There is a wide consensus between borrowers, industry, advocates, regulators, enforcement officials, and legislator that rush to return the student loan settlements is a form for disaster and will outcome to a general confusion and distress for the student loan borrowers”
The Student Debt Crisis Center surveys repeat that those worries to look for that 89 percent of fully employed student loan borrowers said that they were not financially stable enough to return the loan payments by Feb. 1, 2022.
According to the American Civil Liberties Union (ACLU), who was a co-signer on Wednesday’s letter, has been venting out critic towards the US student loan program. In addition, the Members of Congress have been calling Biden to cancel federal student loan debt by executive order, saying it could be the most effective executive action available to provide enormous consumer-driven stimulus.