What Biden’s extended pause on college loan repayments means for Texas students
Students and recent graduates have more time to repay their college loans as they juggle debt, an unstable economy and uncertainty about the future during the ongoing pandemic.
A pause on college loan repayments, interest and collections is being extended further into the year to help students, many of whom have been laid off during COVID-19.
President Joe Biden announced on Wednesday that he wants a “gradual and responsible reduction in pandemic relief” as the country continues to respond to its economic consequences, according to the US Department of Education.
“This additional extension will provide borrowers with more financial security as the economy continues to improve and the country continues to recover from the COVID-19 pandemic,” the U.S. Secretary of Education said. , Miguel Cardona, in the ad.
Here’s what Texans need to know about the extension.
When will students have to start repaying their loans again?
The extension runs until the end of August.
This gives borrowers more time to plan payments and receive a “fresh start”, which ministry officials say can potentially reduce the risk of delinquencies and loan defaults, loan defaults .
Why is the government extending the break?
Cardona said the Department of Education wanted to ensure that students who took out loans could have a “smooth transition to repayment”.
Supporting students and their families is a “top priority” for the Biden administration, he added, “especially those disproportionately impacted by the pandemic.”
The economic relief movement began more than two years ago under the Trump administration. The break has now been extended seven times since businesses closed, wages became unstable and people lost their jobs. In order to pay their college salaries, many students work in the service sector – which has been hit hard due to government-ordered shutdowns, operational challenges and a drop in demand.
Student loan repayment was previously scheduled to begin in less than a month.
What loan relief programs are available?
Students can apply for the Cancellation of civil service loans program.
The program cancels the remaining balance on the loans — received through the ministry. Students must have made at least 120 monthly payments under a repayment plan while working full-time for an eligible employer, which is usually a government organization, the military, or nonprofit organizations. Serving as a full-time AmeriCorps or Peace Corps volunteer also counts.
Borrowers who work in these utility areas must apply for the program by October 31 at his website.
The department said its federal student aid office is working on new partnerships to allow students working in the public service to be automatically credited with progress toward loan forgiveness, eliminating the process that requires them to take through complicated administrative formalities.
Where can I find more information?
Students can find more information about the break and other supports at StudentAid.gov.
What else has the government done to help student borrowers?
In just over a year, the US Department of Education has provided more than $17 billion in loan relief to approximately 700,000 borrowers.
After revamping the civil service loan forgiveness program in October, for example, the department identified more than 100,000 borrowers eligible for $6.4 billion in loan relief.
Relief was also provided to borrowers with disabilities, those who qualified for defense of the borrower — which releases students from all or part of their federal loan debt if they were misled about their school’s educational program or loan — and small business owners with student loans.
The DMN Education Lab deepens coverage and conversation about pressing education issues critical to the future of North Texas.
The DMN Education Lab is a community-funded journalism initiative, with support from The Beck Group, Bobby and Lottye Lyle, Communities Foundation of Texas, The Dallas Foundation, Dallas Regional Chamber, Deedie Rose, Garrett and Cecilia Boone, The Meadows Foundation, Solutions Journalism Network, Southern Methodist University and Todd A. Williams Family Foundation. The Dallas Morning News retains full editorial control of Education Lab journalism.