Suspension of payment of student loans extended until January 31
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Borrowers will get an additional month’s stay on their student loans.
photo by robyn beck / Agence France-Presse / Getty Images
Student loan borrowers will get at least one month’s stay.
The Education Department announced on Friday that Education Secretary Betsy DeVos has extended the freeze on payments and collections of student loans in the coronavirus era until January 31, 2021. The measure, which was to initially expiring Dec. 31, suspended payments and collections on certain federal student loans. In addition, interest rates on the debt were set at 0% during the freeze.
These measures will remain in place until Jan.31, according to a press release. The Office of Federal Student Aid, the Department of Education unit that manages the student loan program, is currently working with student loan companies to notify borrowers that the payment break has been extended, according to the communicated.
In recent weeks, borrowers, student loan companies and advocates have risen more and more concerned on the prospect of reactivating the entire student loan system in a context of still generalized economic fragility.
In addition, the initial schedule of December 31 presented particular challenges. On the one hand, this meant that payments would resume the day after the holiday season, a time when borrowers are less likely to focus on the paperwork involved in signing a manageable student loan repayment plan and when ‘they are facing additional pressure on their budget.
Additionally, it was possible for the government to resume collecting student loan payments on January 1, but the Biden administration reinstated the payment freeze after he took office on January 20, creating a multitude of confusion and headaches. administrative.
With Friday’s announcement, the question of whether borrowers will have to resume payments has been pushed back by a month, in the middle of the news that the stimulus talks in Washington gain momentum.
A coalition of consumer, civil rights and student organizations wrote to DeVos in October, asking him to extend the payment break until September 2021. In a statement announcing the extension, DeVos said that ultimately, the approach to student loan relief should be up to Congress.
“The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been affected,” DeVos said in the statement. “Overtime also allows Congress to do its job and determine what action it deems necessary and appropriate. Congress, not the executive branch, is in charge of student loan policy.
In recent months, advocates and some mainstream Democrats have urged President-elect Biden to cancel at least some student debt, arguing that the executive power has the legal authority to do so. Of yours criticized the notion cancellation of student debt earlier this week, calling it “bogus.”
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