Student loan payments: Biden will no longer extend the break

“We are still evaluating the impact of the Omicron variant, but a smooth transition to reimbursement is a high priority for the administration,” White House press secretary Jen Psaki said when asked. asked Friday if the administration would consider extending the student loan payment break. .

“In the coming weeks, we’ll be posting more details about our plan and engaging directly with student loan borrowers to make sure they have the resources they need and are on the proper repayment plan.” , she added.

Borrower balances have effectively been frozen for almost two years, no payment required on most federal student loans since March 2020. Meanwhile, interest has stopped accumulating and collections on overdue debts have been suspended.

Biden and former President Donald Trump took steps to extend the break. More recently, Biden moved the payment restart date from September 30, 2021 to January 31, 2022, but the administration made it clear at the time that this would be the final extension.

Some Democrats urge Biden to extend relief

Senate Majority Leader Chuck Schumer of New York, Senator Elizabeth Warren and Representative Ayanna Pressley, both of Massachusetts, have pressured Biden to extend the student loan repayment hiatus.

“The pause on federal student loan payments, interest and collections has improved the economic security of borrowers, allowing them to invest in their families, save in emergencies and pay off other debts,” lawmakers wrote in a letter to the president last week. .
Before the break, borrowers were paying an average of $ 393 per month for their student loans, according to a Roosevelt Institute analysis, which was provided to Schumer and Warren at their request. This means that collectively borrowers will pay around $ 7 billion per month, or about $ 85 billion per year once payments are resumed.

Schumer, Warren and Pressley also continue to urge Biden to take further action and write off up to $ 50,000 in student loan debt per borrower.

Biden has said during the presidential campaign that he will support the cancellation of $ 10,000 per borrower, but has taken no action to do so beyond asking federal agencies to conduct reviews to determine if he had the power.

Asked about this campaign engagement on Tuesday, Psaki said executive authority over the cancellation of student loans was still under review and added that the president supported Congress’ action on the issue.

“If Congress sends him a bill, he’s happy to sign it. They haven’t sent him a bill on it yet,” she said.

Biden has repeatedly resisted pressure to write off up to $ 50,000 per borrower since taking office, making it clear at a CNN town hall earlier this year that he does not support the idea.
Separately, since taking office, Biden’s Department of Education has made it easier for those defrauded by for-profit colleges to apply for debt relief. It also temporarily expanded the civil service loan forgiveness program that cancels the unpaid debt of eligible public service workers after making payments for 10 years.

Prepare to resume payments

Most borrowers on federal student loans have not had to make any payments since March 2020. Direct loans as well as PLUS loans, which are available to graduate students and parents on behalf of their children, are eligible for the loan. ‘advantage. Certain federal loans that are guaranteed by the government but not technically owned by the government, known as Federal Family Education Loans, or FFELs, were not eligible. In general, these were disbursed before 2010.

The relief is even greater for those working in the public sector and may be eligible for the federal program of study loan forgiveness after 10 years. They still receive credit for those 10 years of required payments as if they had continued to make them during the pandemic, as long as they are still working full-time for eligible employers.

Borrowers will receive a billing statement or other notice at least 21 days before their payment is due, according to the Department of Education. Those who had automatic payments in place may need to notify their loan department. company they want those Carry on.

If federal student loan borrowers can no longer pay their monthly payment, they may be eligible for an income-based repayment plan. Under these plans, which are based on income and family size, a monthly payment can be as low as $ 0 per month. The Department of Education has more information online about restarting the payment.

This story has been updated with additional information.

CNN’s Maegan Vazquez and Jasmine Wright contributed to this report.

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