Joe Biden, President announcedOn Wednesday, the President announced that his Administration will continue to extend the grace period for repayments of federal student loans up until August 31, 2022.
The Department of Education has been deferring student loans with zero interest accrual from March 2020. President Donald Trump signed the CARES Act, which authorized the Department of Education not to collect repayments as the economy shut down in the wake of the coronavirus.
Each deadline has been extended since that time. First, federal student loan repayment was to be resumed in September 2020. But, Trump extended his moratorium until Dec. 31, 2020. Then, it would continue to Jan. 31, 2021.
Biden was inaugurated as the new president. ExtendedRepayment moratorium through September 2021 Biden will be retiring on Aug. 6, 2021. AnnouncementBiden announced that the moratorium on student loan repayments would be extended to January 31, 2021. Biden extended his moratorium until May 1, 2022 on Dec. 22, 2021. In his statementPresident Obama asked that borrowers “do their share as well” by “taking full advantage of Department of Education resources to assist you in preparing for your resume payments.”
Today’s deadline has been extended yet again to August 31 2022. Biden explained that Americans can breathe more easily as they rebuild and recover from the pandemic.
Politicians and prominent Democrats want to cancel or reduce student loan debt, not just defer payment.
“Student loan default is holding back millions across the nation who are unable to buy houses, start small businesses, or buy cars. President Biden needs to #CancelStudentDebtThese people are important not just for themselves but for the whole of our economy. Senator Elizabeth Warren tweetedIn June 2021.
Rep. Troy Carter (D–La.) Introduced the Student Loan Relief ActThe federal student loans would be forgiven as much as $50,000 by August 2021.
Carter: “It is Congress’ responsibility to improve the lives American citizens.” A press release. According to a press release, “Eliminating the immense burden of student loans for millions of Americans young and old saddled with debt is my top priority in Congress.” This bill will accomplish exactly what you want.”
Biden has been reluctant to pass broad-scale student loan relief because it would only be available to the most well-off Americans.
“The idea that … I’m going to forgive the debt, the billions of dollars in debt, for people who have gone to Harvard and Yale and Penn …” President Biden Anderson Cooper hosted a town hall in February 2021. However, some elite school graduates are eligible for federal student loan debt forgiveness. This is also true of former students of schools that are dis-accredited or closed to-profit.
Critics oppose universal student debt relief under federal law ArgumentIt would only be a giveaway for the richest Americans. Borrowers with four years of college degrees earn more than those who just have a high school diploma. Graduate degree holders make more that people with four-years degrees. The Brookings Institute’s Adam Looney stated that so many student loans are owned by borrowers who have used them to improve their earnings potential. ReportThe burden of debt must be compared to future earnings.
It is not possible to subtract the education value from the calculation of net worth, but include the debt used for that education. The result would be like determining a homeowner’s wealth using their mortgage amount and leaving out the value the house. The result would show that homeowners are poorer than renters and that those living in mansions have the lowest social status.