Big Changes to Public Service Loan Forgiveness Program
The Biden administration has extended the pause on federal student loan payments until January 31.
The 0% interest and $0 payment relief was set to expire September 30 for an estimated 42 million Americans with federal loans. This final extension comes after a historic 19-month freeze put in place by Congress and then extended by both the Trump and Biden administrations.
Here is what Education Secretary Miguel Cardona said in a statement. “As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment.”
NBC reported that “In a statement, the Department of Education said this would be the “final extension” and that it felt a “definitive end date” would reduce the risk of delinquency and defaults once payments restart.”
What you need to know:
As we have reported in the past, Biden has stated that does not believe he has authority to cancel student debt, but would support Congress passing a bill canceling $10,000 in debt.
There are currently 45 million Americans with student loan debt and the Federal Reserve estimated that Americans owe more than $1.7 trillion in student loans. Women hold two-thirds of student loans outstanding and studies show BIPOC students are more likely to take on student debt and disproportionately struggle to pay it back. The highest default rates are among students who attended for-profit institutions.
This pause affects about 41 million borrowers but research from Pew conducted in August-September found that, among borrowers who said the relief applied to them, about 40% did not know when their loan payments were set to resume. Help us spread the word by sharing this article!
The Snowball team is focused on keeping you informed and helping you make the right decisions for your student loans. Sign up here for our Student Debt Report –– we’ll send you an email whenever there are significant changes in policy.
Washington Post: https://www.washingtonpost.com/us-policy/2021/08/04/democrats-eviction-student-loans/