The Ministry of Education announced on Friday that the temporary suspension of student loan repayment has been extended for the last time until January 31, 2022. The repayment was originally scheduled to resume on October 1, 2022.
This is the fourth extension of the repayment suspension period since the Coronavirus Aid, Relief and Economic Security Act was first promulgated in March 2020. During the suspension period, all student loan payments were suspended, the interest rate for each borrower was set to 0%, and the collection of defaulted loans was suspended.
The department said that with additional time and a clear end date, borrowers will be able to plan for the resumption of payments, thereby reducing the risk of defaults and defaults after the restart. It also stated that it will work to facilitate the smooth transition of borrowers to repayment, including improving student loan services.
Education Secretary Miguel Cardona said: “The suspension of payments has always been a lifeline, allowing millions of Americans to focus on family, health and finances during the national emergency, rather than student loans.” In release“As our country’s economy continues to recover from the abyss, this final extension will provide students and borrowers with the time they need to plan the restart and ensure a smooth repayment.”
Recent survey data suggests that extensions by borrowers may be necessary.One analyze The Pew Charitable Trust found that in a survey conducted last spring, two-thirds of the respondents said that if they recover one month from the date of the survey, they will have difficulty paying.other PollsAccording to a survey conducted by Student Debt Crisis, of the nearly 24,000 borrowers surveyed, 90% said they are not ready to resume repayment in October.
Advocates and Democratic lawmakers Keep calling The Biden administration extended the suspension for several weeks, and many of them said that the rush to resume loan repayments would lead to disaster. The announcement was praised by many people, despite some warnings. At the same time, Republican lawmakers criticized the decision.
Justin Draeger, president and CEO of the National Association of Student Financial Aid Managers, said that although the organization welcomes the decision, the department must immediately start preparing for the restart.
“Repayment of millions of borrowers cannot be done with a simple trigger switch, and may even need to be implemented in stages,” Dräger said. “Delays cannot last indefinitely. We urge the Minister of Education to use his powers in this country’s emergency to simplify the repayment process as much as possible under the most favorable terms and conditions possible.”
Bobby Scott, the chairman of the House Education and Labor Committee and a Democrat of Virginia, also praised the decision, saying that extending the moratorium would “help continue our economic recovery momentum and give student loan borrowers time to renew. Improve their financial security before you start…”
Other Democrats expressed appreciation for the decision, but still pleaded with the government to take more measures to resolve the student debt crisis. New York Senate Majority Leader Chuck Schumer, Massachusetts Senator Elizabeth Warren, and Massachusetts Rep. Ianna Presley have all stated that President Biden still needs to take administrative action against widespread student debt. eliminate.
The legislator said in a joint statement: “We are very pleased that the Biden administration has responded to our call to extend the suspension of the payment of federally held student loans, providing huge opportunities for millions of borrowers facing a catastrophic financial cliff. “Although this temporary relief is welcome, it is far from enough. The cancellation of student debt is one of the most important actions President Biden can take now to build a more just economy and address racial injustice. The issue of equality.”
The student debt crisis also continued to call on Biden to cancel his student debt, urging him to take action before resuming repayment in January.
“Although today’s announcement provides some financial protection for borrowers and their families to recover from unemployment, reduced working hours, or closure of businesses, the reality is that the president can do more,” said Natalie, Executive Director of Student Debt Crisis Ya Abrams said.
However, not all Democrats believe that Biden can unilaterally cancel student debt. Speaker of the House of Representatives Nancy Pelosi, a Democrat from California, Said last month Biden can postpone or postpone student loan debt, but the power to cancel it lies with Congress.
Some people ask Biden to do more, others think the government has done enough. Representatives of Virginia Fox, a Republican from North Carolina and a senior member of the House Education and Labor Committee, said the government should work with Congress to responsibly restore the student loan portfolio before October 1.
“This delay has caused serious damage to borrowers across the country, and our children will pay the ultimate price for this irresponsible delay,” Fox said.
Richard Burr, a Republican senator from North Carolina and a senior member of the Senate Health, Education, Labor, and Pensions Committee, outlined this cost in his criticism of the decision, noting that “based on previous loan suspensions In addition to the US$76 billion that has been used to suspend loans in the past year and a half, this extension will cost US$20 billion in subsidies in the next four months.”
“Students and families faced tremendous challenges last year, but the U.S. economy continues to recover, and there is no reasonable reason to continue to extend the period for non-payment of student loans,” Burr said. “The actions of the Biden administration today are against the interests of students, borrowers and taxpayers.”