Could Biden Cancel Some Student Debt Through Executive Action? The new stimulus package does not expand this relief to cover additional student loans, which congressional Democrats had wanted. In addition, many student loan servicers have voluntarily pushed annual recertification deadlines for income-driven repayment plans well into 2021, meaning many borrowers may not have to take action on their loans for several more months. Now is the time, though, to decide what to do before your bill arrives in January 2021. Reading Time: 3 min 0. A bipartisan group of senators has released the text of a proposed second stimulus bill, and it contains some good news for certain student loan borrowers. New Proposed Stimulus Bill Could Extend Student Loan Relief And Unemployment Benefits - But Includes No Cash Payments, Will Trump Extend Student Loan Relief? Needless to say, student loan relief of any kind would be a huge help to many. Adam S. Minsky is an advocate, innovator, and entrepreneur who established a unique law practice devoted entirely to assisting student loan borrowers and their families. Here’s the latest. Congress May Be Poised To Extend Student Loan Relief Further Into 2021 Forbes - Adam S. Minsky, Esq. House Democrats passed legislation that would push the student loan moratorium’s expiration to September 2021. A previous summary of the proposed stimulus package had suggested the extension would be to April 30. © 2020 Forbes Media LLC. The U.S. Department of Education announced the update in … The resulting uncertainty has led student loan borrowers to scramble to budget for payments, apply for income-driven repayment plans, and consider whether to request hardship deferments or forbearances if they cannot afford their regular payments. during "Mornings With Maria" at Fox Business Network Studios on February 20, 2020 in New York City. One part would contain the more popular elements. (Photo by John Lamparski/Getty Images). Congressional Democrats have been pushing to further extend student loan relief well into 2021 as part of larger stimulus negotiations. Senate Minority Leader Chuck Schumer (D-NY) echoed that sentiment on behalf of Senate Democrats. Nevertheless, the stimulus package would provide much-needed relief to millions of student loan borrowers. The Education Department gave millions of Americans a brief reprieve Friday when it extended a payment pause for federal student loans for an additional month. This legislation suspended all payments and interest on government-held federal student loans. The emergency pandemic stimulus legislation also stopped all collections efforts on defaulted federal loans, such was wage garnishments and interceptions of federal tax refunds. NEW YORK, NEW YORK - FEBRUARY 20: Anchor Maria Bartiromo interviews Education Secretary Betsy Devos ... [+] during "Mornings With Maria" at Fox Business Network Studios on February 20, 2020 in New York City. Adam S. Minsky is an advocate, innovator, and entrepreneur who established a unique law practice devoted entirely to assisting student loan borrowers and their families. Federal student loan borrowers will not be expected to make payments through January of next year, though they will continue to be able to do … ... is extended through January 2021 … Federal student loan relief will now stretch ten months. DeVos Extends Federal Student Loan Payment Suspension Into 2021. The freeze on student loan payments has been extended through January, though borrowers may continue making principal-only payments at 0% interest. Adam S. Minsky is an advocate, innovator, and entrepreneur who established a unique law practice devoted entirely to assisting student loan borrowers and their families. What The Election Results Mean For Student Loan Borrowers, Biden's Victory Means DeVos Is Out By January. Your federal student loans are in loan rehabilitation. Recognized as a national authority on student loan law and policy, Adam has forged substantial connections with consumer advocates, government agencies, elected officials, media groups, and nonprofit organizations to effectuate systemwide change. 0. Citing its authority under the HEROES Act of 2003, the Department said, “Federal student loan borrowers will not be expected to make payments through January of next year, though they will continue to be able to do so and benefit from the 0% interest rate as they pay down principal. Borrowers can use the extra time to prepare to start making payments again soon. He is also an experienced public speaker, consultant, and writer on student loan-related topics. Over $300 billion in commercially-held FFEL loans, federal Perkins loans issued by colleges and universities, and private student loans were excluded from the original CARES Act. Lawmakers have been engaged in furious negotiations to try to hammer out a bipartisan compromise stimulus package that can pass Congress before the end of the year. Notably, the current student loan relief is limited to government-held federal student loans only. Education Secretary Betsy DeVos has extended an existing moratorium on student loan payments, interest, and collections into 2021. The extension helps address borrower concerns during the transition of the Biden administration. The other part would contain the more controversial elements — namely, funding for state and local governments (which Democrats want), and a COVID-19 liability shield (which Republicans want). Here’s a bit of good news: President Donald Trump has extended student loan relief to December 31, 2020 by executive action . The Heroes Act—the $3 trillion stimulus package House Democrats passed—included a provision to extend the pause on federal student loan payments through September 30, 2021. You may opt-out by. Passage of the current stimulus proposal is by no means guaranteed, but Congressional leaders have expressed optimism. If you’re currently rehabilitating defaulted … The survey found that healthcare workers were particularly concerned. The Department of Education just announced an extension of the student loan moratorium to January, 31, 2021. "I can speak for the Republican side. ... 2021, have stalled. Borrowers should contact their loan servicers for additional information. The temporary student loan relief included in the CARES Act has been extended through 1/31/2021. White House Stimulus Check Proposal Excludes Help For Student Loan Borrowers, DeVos Extends Student Loan Relief Into 2021: What You Need To Know, These Student Loans Are Not Covered By DeVos’s Extension Of Relief. President Trump suggested over the summer that his administration could further extend the moratorium through executive action, but he had not made any recent public comments to affirm this. This has hindered the ability of congressional negotiators to find sufficient common ground for a broad relief package. Under the current provisions governing the student loan moratorium, the months of suspended payments would count towards loan forgiveness programs (such as Public Service Loan Forgiveness), as well as loan rehabilitation programs for borrowers making efforts to cure defaulted federal loans. If nothing else changes between now and year end, then the current, temporary student loan relief will expire as planned on December 31, 2021. August 8, 2020 – President Trump extends the student loan relief. If you are a recent medical grad, chances are good you have outstanding student loans. I’m sure you are tired of the downpour of bad news that has been 2020 so far. The student loan moratorium was originally supposed to end in September, but President Trump subsequently extended that relief to December 31. Furthermore, after President-Elect Biden is sworn into office on January 20, 2021, he could use executive action to enact additional student loan relief, as well. The two sides have had months to pass another relief bill. How Trump intensified the GOP’s war on reality; Fauci recommends Trump and Pence get vaccinated for Covid-19; Rep. Paul Mitchell ‘Disaffiliating’ From GOP Because It Can’t Admit Trump Lost Presdent-Elect Biden could further extend the student loan moratorium via executive order in the spring, although it is too soon to know whether he would do so. Advocates and members of Congress have proposed various measures to extend the student loan payment pause, ranging from March 31, 2021 to September 30, 2021. Ultimately, borrowers may be able to avoid making payments until much later in 2021, experts say. He has expressed a preference for Congress to take action. All Rights Reserved, This is a BETA experience. A bigger Social Security paycheck, more enhanced unemployment and student loan forgiveness are … You may opt-out by. A bipartisan group of senators has released the text of a proposed second stimulus bill, and it contains some good news for certain student loan borrowers. Non-payments will continue to count toward the number of payments required under an income-driven repayment plan, a loan rehabilitation agreement, or the Public Service Loan Forgiveness program.”. The additional month of relief for borrowers would avert an imminent “cliff” on December 31 — a potentially disruptive gap after the current relief expires, but before President-Elect Biden is sworn in on January 20, 2021. Recognized as a national authority on student loan law and policy, Adam has forged substantial connections with consumer advocates, government agencies, elected officials, media groups, and nonprofit organizations to effectuate systemwide change. “The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been impacted," said Secretary DeVos. 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We want to make a law to agree where we can and help people who need," Senate Majority Leader McConnell (R-KY) said yesterday. The federal student loan payment pause is extended through Jan. 31. Included in this proposal is $4 billion dedicated to student loan relief. Included in the larger, more popular portion of the stimulus package is an extension of existing student loan relief to April 1, 2021. The student loan moratorium was originally supposed to end in September, but President Trump subsequently extended that relief to December 31. The U.S. Department of Education announced the update in a press release on Friday. March 27, 2020 – Congress passes the CARES Act. Biden has indicated a willingness to enact some policy changes through aggressive executive action if necessary, but has been largely silent on his position regarding cancelling student debt via executive authority. While this allocation of federal funds could be sufficient to cover an additional extension of the student loan moratorium further into 2021, specific details regarding student debt relief related to this stimulus proposal have yet to be disclosed. For much of 2020, millions of student loan borrowers have not had to repay their federal student loans because of emergency pandemic relief under the CARES Act. Secretary of Education Betsy DeVos extended the federal government’s moratorium on mandatory federal student loan payments, postponing the deadline for the third time since Congress passed the first major COVID-19 relief package back in late March. He is also an experienced public speaker, consultant, and writer on student loan-related topics. ... a continuation of the federal student loan deferral and more. The latest proposal would bifurcate the stimulus package. We May Know Soon. Relief for student borrowers had been scheduled to expire at the end of the year. December 15, 2020. in Loans. DeVos has extended the moratorium on student loan payments and the accrual of interest until Jan. 31, 2021. It also stopped all collections efforts — such was wage garnishments and offsets of Social Security benefits — for borrowers in default on their student loans. Here’s the latest. If the pause is not extended, student loan borrowers will be required to resume making payments in February of 2021. YES: The employment conditions that supported the federal government’s decision to offer loan relief in March 2020 will still exist in early 2021. Opinions expressed by Forbes Contributors are their own. In a recent survey by Student Debt Crisis and Savi, 77% of student loan borrowers covered by the moratorium indicated that they do not feel financially secure enough to resume their student loan payments, and more than half of surveyed borrowers rate their current financial wellness as poor or very poor since the pandemic began in earlier this year. For millions of student loan borrowers who have benefited from payment relief during the coronavirus pandemic, the payments will resume beginning Jan. 1, 2021. "The added time also allows Congress to do its job and determine what measures it believes are necessary and appropriate.”. NEW YORK, NEW YORK - FEBRUARY 20: Anchor Maria Bartiromo interviews Education Secretary Betsy Devos ... during "Mornings With Maria" at Fox Business Network … Adam S. Minsky is an advocate, innovator, and entrepreneur who established a unique law practice devoted entirely to assisting student loan borrowers and their families. © 2020 Forbes Media LLC. 1 week Congress May Be Poised To Extend Student Loan Relief Further Into 2021 Forbes . WASHINGTON – U.S. Secretary of Education Betsy DeVos announced today the extension of the federal student loan administrative forbearance period, the pause in interest accrual, and the suspension of collections activity through January 31, 2021. ... it is likely to include an extension of benefits into 2021. VIEWS. A bipartisan group of senators unveiled a new, $900 billion stimulus bill this week designed to revive efforts to reach a compromise on broad economic relief before the end of the year. What The Election Results Mean For Student Loan Borrowers. Consumer rights advocates and progressive Democrats in Congress are pushing Biden to use executive action to enact sweeping student loan relief, including an extended moratorium on payments as well as broad student loan forgiveness. I’m an attorney focused on helping student loan borrowers. Congress May Be Poised To Extend Student Loan Relief Further Into 2021. I’m an attorney focused on helping student loan borrowers. Could Biden Cancel Some Student Debt Through Executive Action? Since March, millions of federal student loan borrowers have had their payments and interest suspended under the CARES Act. Congressional Democrats have been pushing to further extend student loan relief well into 2021 as part of larger stimulus negotiations. Opinions expressed by Forbes Contributors are their own. Servicers would have started generating reminder notices for student loan bills as early as next week. The U.S. Department of Education announced the update in a press release on Friday. While certain elements of a new stimulus package are broadly popular — such as extending unemployment relief and providing additional funding to small businesses — other proposals have generated more partisan opposition. Education Secretary Betsy DeVos has extended an existing moratorium on student loan payments, interest, and collections into 2021. (Photo by John Lamparski/Getty Images), EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation With Forbes Insights, If Trump Doesn’t Sign New Stimulus Bill Today, Extra $300 In Unemployment Will Not Start Until At Least January And Will Be Cut From 11 Weeks, Year In Review: Student Loan Forgiveness Legislation, Joe Biden Will Limit Student Loan Forgiveness, Accountants In Syndicated Conservation Easement Shelter Plead Guilty, Why Joe Biden Won’t Cancel Your Student Loans—Here’s What He Just Said, Biden Says He Is “Unlikely” To Cancel $50,000 In Student Loan Debt By Executive Order, This Week In Credit Card News: Pandemic Leads To Record Gift Card Sales; Card Applications Take Big Drop, Biden May Support Only $10,000 In Student Loan Forgiveness, College Funding Changes In The Pandemic Relief Bill, unveiled a new, $900 billion stimulus bill. But the Democratic-controlled House and Republican-led Senate have been at an impasse for months. President-elect Biden's 2021 stimulus plan: Will you get a second check or not? As I stated in my proposal for college debt relief, writing off only $17,000 of debt per debt holder would wipe out the obligation of a majority of student loan debt holders in America. The student loan relief was originally scheduled to end in September, but the Trump administration granted two extensions — the first to December 31, and the second to January 31, to provide Congress with additional time to extend the relief further. As part of a much larger Covid-19 relief package, the CARES Act froze student loan payments and interest through September 30, 2020. You don’t have to make another federal student loan payment in 2020. That would continue to be the case if Congress passes the additional extension to April 2021. Background on the Student Loan Interest and Payment Suspension. The White House has been pushing its own version of a new stimulus package that excludes an extension of student loan relief. Education Secretary Betsy DeVos has extended an existing moratorium on student loan payments, interest, and collections into 2021. All Rights Reserved, This is a BETA experience. SHARES. Included in the larger, more popular portion of the stimulus package is an extension of existing student loan relief to April 1, 2021. A bipartisan group of senators has released the text of a proposed second stimulus bill, and it contains some good news for student loan borrowers. Any stimulus legislation passed by Congress would have to be signed by President Trump. Is a BETA experience, 2020 – President Trump subsequently extended that relief to millions of student payment. This proposal is $ 4 billion dedicated to student loan moratorium to January, though borrowers May continue principal-only... 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