July 22, 2021

Education Department Senators Warren, Smith, & Markey Urge Biden To Extend Federal Loan Pause To 2022

News

The Department of Education has been urging the Biden administration to once again give an extension to the student loan pause. This news came after people involved in internal discussions revealed this to the public. This brand new clamoring from the department puts even more pressure on President Joe Biden ahead of the agreed fall deadline.

But they aren’t the only ones asking for such an extension. They join a growing call that involves advocacy groups and congressional democrats. Democrats Elizabeth Warren and Edward J. Markey are among those involved.

These people all want the same thing: they want the White House to continue providing pandemic benefits to millions of student loan borrowers nationwide.

White House Undecided If They Will Restart Federal Loan Payments

However, a final decision has not been made by the White House yet as to how and when they plan to restart federal student loan payments. Such payments have been paused ever since the start of the COVID-19 pandemic. The Department of Education has suggested to the White House that they extend their loan relief a final time up to 2022.

Several voices in the White House support the further extension of this student relief. They want to give the department additional time to come up with an idea for how they can transition all borrowers back to repayment.

Meanwhile, other advisers are worried that if the emergency pandemic relief program continues into 2022, this may undercut the messaging of the administration regarding the economic recovery strength of the nation.

They also note that other relief measures to cope with the pandemic will also be ending in the following months. According to the president, he will let enhanced unemployment benefits continue until September this year.

Meanwhile, the CDC has announced that its last extension of the eviction moratorium throughout the nation will run up to the end of July 2021.

Despite the student loan relief expiring by the end of September, the Department of Education has not yet provided instructions to the loan servicing companies it hired. There have been no instructions yet for how they should handle the collections or whether they ought to plan to resume work by October.

Private Student Loan Companies Want Those With Capacity to Resume Loan Repayment

According to the administration, the pause was meant to support borrowers who were affected by the pandemic. They also said that the Department of Education is ensuring that all struggling borrowers are continuously supported even when the payments have been lifted.

There are also private student loan industry players that are urging the department to start allowing payments once again this fall, at least for borrowers who can. The American Fintech Council also urged the Biden administration to provide relief to students with no capacity to pay but restart payments for those who can meet their obligations.

There is still no final decision by the Biden administration as to whether they will extend the pause for the federal student loan payments, despite pressure from all angles.

Meanwhile, other parties are hoping that the White House will resume loan repayments for those who are capable. Although there is still no clear answer, it appears that the administration may once again give in to the pressure of extending the student loan pause.

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