The Biden government plans to announce another extension of the moratorium on federal student loan borrowers, sources told CNBC. The pause is likely to last until August. This would be the sixth extension of the break, which has now lasted two presidencies. The pandemic-era relief policy suspending student loan accounts is currently scheduled to expire in May. Former President Donald Trump first announced his stay on the bills for millions of Americans with education debts in March 2020, when the coronavirus pandemic brought the US economy to its knees and unemployment soared. Almost all borrowers eligible for the break have used it, with only 1% of them still paying, according to an analysis by higher education expert Mark Kantrowitz. More from Personal Finance: These States Have the Highest and Lowest Tax Charges See how you can get relief from the gas pump now The Big Waiver is still in full swing The country has emerged from the darkest days of the pandemic and the unemployment rate has fallen again. However, the Biden government has expressed reluctance to continue payments before making its decision to write off a student loan. “The president will look at what we need to do about student debt before the break ends, otherwise he will extend the break,” White House Chief of Staff Ron Klein told the Pod Save America podcast last month. “Joe Biden is currently the only president in history where no one has paid off his student loans for his entire presidency,” Klein said. Democrats and supporters have warned that a resumption of payments after more than two years could mean to some that Biden was falling short of his promise to forgive at least $ 10,000 in student debt, leading to damaging titles and lower attendance. November. . Senate Majority Leader Chuck Schumer, DN.Y., and Sen. Elizabeth Warren, D-Mass., Are pushing for the president to scrap nearly $ 50,000 per borrower. Nearly 66% of potential voters say the president is forgiving student debt, with more than 70% of Latino and Black voters in favor, according to a recent poll. Even before the public health crisis, student loans were a major challenge for many households. Outstanding debt for education exceeds $ 1.7 trillion, burdening families more than car or credit card debt. About 40 million people in the US have school loans and more than a quarter are in arrears. However, Scott Buchanan, executive director of the Student Loan Service Alliance, a trade group for federal student lenders, warned that repeated extensions would cause their own problems in the lending system. “What should a borrower think or plan anymore when the government is constantly changing its mind?” said Buchanan. “When the inevitable recurrence finally occurs, millions of borrowers will probably lose it and go bankrupt because of the false expectations that the government is now creating.” How will more time without student loan payments affect you? If you want to talk about a story, email me at [email protected]
