Biden extends COVID relief for student debt until January 2021
The Biden administration has extended student debt relief in the event of a pandemic until Jan.31, 2022, the Education Department said on Friday.
Driving the news: The Education Department said this was the final extension of the federal loan payment freeze, which maintained a 0% interest rate and a pause on collections on delinquent loans. The current moratorium on payments was originally scheduled to end on September 30.
- Americans owe about $ 1.6 trillion in student loans. Without the extension, more than 30 million people would have been expected to start paying off their student loans in October, even as the pandemic raged.
Details: The agency noted that the extra time and final end date will give borrowers the ability to plan ahead and reduce the risk of default or default.
- Federal officials will also work to improve the service of student loans in an effort to help borrowers get back on repayment, according to the ministry.
What they say : “The payment break has been a lifeline that has allowed millions of Americans to focus on their families, health and finances instead of student loans during the national emergency,” the secretary said. ‘Education Miguel Cardona in a press release.
- “As our country’s economy continues to recover from a deep hole, this latest extension will give students and borrowers the time they need to plan for the restart and ensure a smooth return to repayment,” added Cardona.
- “The ministry’s priority is to support students and borrowers during this transition and to ensure they have the resources they need to access affordable, high-quality higher education. “
The big picture: Top Democrats have called on President Biden to extend the student loan hiatus for weeks, urging him to write off $ 50,000 per borrower.
- The administration has written off more than $ 55.6 million in student loan debt for victims of for-profit college fraud.
- The Education Department says it has also approved $ 1.5 billion in borrower defense claims and reinstated $ 1.3 billion in loan discharges.