With the end of an 18-month suspension of federal student loan payments only 90 days away, there are growing signs that President Biden may extend the moratorium beyond its current expiration.
The CARES Act, the stimulus bill that Congress enacted last year in response to the pandemic, temporarily stopped all payments on government-held federal student loans, froze interest, and suspended all collections activities. The broad student loan repayment suspension was supposed to last six months, but it has since been extended several times by both former President Trump and President Biden upon taking office. The current extension of the moratorium is set to end on September 30, 2021 — meaning that millions of student loan borrowers will be resuming repayment in just a few months.
So far, the Biden administration has not announced any further extension. And it is very possible that student loan borrowers will indeed need to resume repayment in October. But a further extension of the student loan payment pause is nevertheless quite possible. Here’s why.
Student loan borrower activists and advocacy groups have been sounding the alarm about the rapidly approaching expiration of the student loan payment moratorium. They have three main arguments:
A coalition of these organizations submitted a letter to President Biden last week, urging him to extend the moratorium.
Influential Democrats in Congress have also amped up the pressure. Last week, Senator Elizabeth Warren (D-MA) joined several progressive allies in calling on President Biden to extend the student loan moratorium to March 2022 or beyond. Other powerful Democrats have recently joined in, with Senator Patty Murray (D-WA) and Bobby Scott (D-VA), chairs of the Senate and House Education Committees, sending their own letter to Biden.
Last month, the Department of Education initiated a series of public hearings, the first step in a comprehensive review and possible overhaul of major federal student loan programs such as income-based repayment plans, Public Service Loan Forgiveness, disability discharges, and Borrower Defense to Repayment. Many of these programs have been plagued by administrative and bureaucratic problems for years. But the process of reforming federal student loan programs through the regulatory process is extraordinality slow and tedious, requiring ongoing input from stakeholders and the public. Finalized regulations are likely years away from implementation.
On the other hand, extending the student loan payment moratorium is easy — it can be done through a straightforward executive action, as President Biden already did on his first day in office in January. And the benefits of the extension would be immediately felt by millions of borrowers.
The Biden administration has only recently finalized appointments to key positions within the U.S. Department of Education, with Richard Cordray tapped to manage the federal student aid system in May. Advocacy groups have argued that the student loan payment moratorium should be extended to provide the administration with more time to enact key reforms, such as the following:
The Biden administration has suggested on several occasions that the student loan pause could be further extended. At a public event in May, Secretary of Education Miguel Cardona said, “We’re looking at it. Obviously, we’re going to always take the lead from what the data is telling us and where we are as a country with regards to the recovery of the pandemic. [A further extension] is not out of the question.” More recently, Cardona said last week, “We recognize the impact that the pandemic had on our borrowers. And extending the pause is something that we have had conversations about.”
Still, the administration has not definitively stated that a further extension is coming. And officials have not indicated when a final decision may be made or announced. In the meantime, student loan borrowers should plan on resuming repayment in October — but watch for further developments.
Department of International Relations and European Studies https://www.ibu.edu.ba/department-of-international-relations-and-european-studies/