Thu, 11 Aug 22 10:28:23 +0000

The time is ticking for Biden to make an important decision on student loans

(CNN)With less than three weeks left until the federal student loan moratorium expires, millions of borrowers But President Joe Biden could extend the current moratorium or forgive the debt.

Borrower balances have been effectively frozen for more than two years since March 2020, when the coronavirus pandemic forced many Americans into lockdowns, leaving most federal student loan payments there is no need. During this time, interest has stopped accumulating and collection of defaulted receivables is pending.

Now, with the borrower's fortunes at stake, the President is set to spend a few days on a long-awaited vacation. And the Biden administration hasn't sent a signal to suggest announcing a student loan decision while he's away.

Biden has already extended his suspension four times. , has repeatedly argued that borrowers need to be able to get back on their feet. The economy grew stronger in April, when it last extended a moratorium on payments, but said the country was "still recovering from the pandemic and the unprecedented economic turmoil it caused."

In addition to the possibility of extending the suspension, the White House will Biden cancel his $10,000 per borrower, except for those whose annual income exceeds his $125,000 I indicated that I was considering it.

"We have not yet made a decision. If a decision is made, the Department of Education will contact borrowers directly about ending the suspension of payments," the White House said. spokeswoman Karine Jean-Pierre said. she told reporters on Tuesday. “In terms of cancellations, the President directly understands the strain student loans place on families, and therefore will continue to evaluate cancellation options.”

He stressed that he would make some kind of announcement by the 31st.

STUDENT LOANS With only three weeks left before his servicers are scheduled to resume paying federal student loans, Biden and his team are closing it out. Typically, loan servicers send out bills at least 21 days before payment is due, but Biden hasn't made up his mind yet, so the bill hasn't been sent yet.

"There has been no change in guidance from the Department of Education for weeks. Servicers have been told to refrain from any communication regarding resuming payments." Student Loan Servicing Alliance Loan Service Alliance) is a non-profit organization responsible for servicing over 95% of all federal student loans.

Biden didn't announce his decision on student loans, which was announced before he left Washington for the beach in South Carolina on Wednesday, but the headwinds of weeks of success and turmoil in the White House have pushed him to the sidelines.

Over the past three weeks, Biden has dealt with Covid-19 cases and subsequent rebounds, and signed two major bipartisan bills. But the Senate passed a streamlined version of his landmark climate and health bill, green light for the targeted killing of the man who succeeded Osama bin Laden as al-Qaeda leader. did.

Meanwhile, despite concerns over the prospect of a recession last month, unemployment across the country has disappointed economists' expectations, gasoline prices have continued to fall over the past few weeks, and inflation} But Americans are paying more for food, gasoline, cars and other daily necessities, and their budgets are tight.

American attitudes toward student debt relief are divided broadly by partisanship and by generation.

In his CNN poll in May, a majority of Democrats (56%) - an even larger majority of self-proclaimed liberals (69%) - He said there was too little effort. According to a CNN poll, only a third of him, Republicans and self-proclaimed conservatives, say the same about student loan debt. 70% of adults under 35 say their government has responded poorly, dropping from 35 to 50% for those aged 49 and 35% for those aged 50 and over. .

Continuing the forbearance or canceling the debt can bring financial relief to the borrower. Butstudent loan forgiveness also likely shifts hundreds of billions of dollars in costs to taxpayers, including those who choose not to go to college or who have already paid for their education. Loan cancellations can also fuel inflation without doing anything to address the root of the problem: college affordability.

And the president has so far failed to get Congress to approve most of the college affordability proposals. The latest version of his proposed social safety net bill, the Reducing Inflation Act, was approved by the Senate this month and is now on the ballot in the Democratic-controlled House of Representatives. However, the bill does not contain a previously proposed provision to reduce costs forcolleges.

How many of the 43 million federal student loan borrowers, many of whom are 43 million federal student loan borrowers, qualify for student loan forgiveness, beyond payment suspensions and government action to broadly cancel student loan debt. There are several For example, targeted debt forgiveness programs already exist to help public sector workers and borrowers who have been duped into for-profit universities.

Also under Biden, some of these programs were temporarily expanded, making it easier for some borrowers to obtain waivers. Approved cancellations covering more than $26 billion for more than 10,000 borrowers. This is more than under any other president.

The time is ticking for Biden to make an important decision on student loans

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