President Joe Biden has extended the administrative forbearance on federal student loans, which had expired at the end of March 2020. It has prevented the addition of interest and stalled collections on defaulted debt. Previously, the pause had ended on March 30. The new date is Sept. 30, 2021, which is still more than two years away. According to the Education Department, the new halt will save 41 million borrowers $5 billion a month in interest and principal payments, while reducing the likelihood of falling behind on their loan payments.
The extension comes after the White House had said the government was not prepared to offer mass forgiveness of student loan debt until the end of January. The CARES Act had originally been set to last six months, but the Biden admin extended it for another two years. The pause was originally set to end on January 31, 2020, but President Biden’s recent announcement has added another six months to the pause.
Although the extension extends the pause, sweeping student loan forgiveness remains elusive. The Biden administration’s lack of action on this issue has been criticized by progressives who say the government can do more. However, some borrowers are unsure that the pause is enough to avoid the possibility of bankruptcy. Therefore, there is no way to tell if the Biden administration will continue with the pause or not.
Obama had already extended the forbearance on student loans, but many people in the U.S. remained skeptical about the decision to extend it beyond the end of next month. The White House maintained that the forbearance would not extend past the end of the month. The president has also said that he would be happy to provide the necessary money to start the payments again, regardless of whether they are for the government or not.
The decision to extend the federal student loan payment pause has triggered a heated debate in Washington. While Ex-President Obama has backed the bill, Democrats have been calling for the extension of the moratorium. Similarly, Senate Minority Leader Schumer has called for the president to cancel the student debt pause. Ultimately, the decision is a good thing for students, but it must be made by the president.
The extension is much-needed in light of the rising cost of living and the omicron-like virus that has affected a large number of people in recent weeks. Nonetheless, some progressives have argued that a wider cancellation of student debt is more necessary. The N.A.A.C.P. President, Derrick Johnson, urged the administration to extend the forbearance.
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