White House extends student loan payment and interest relief through Aug. 31.
04/06/2022 3:00 P.M.
1.5 minute read
As a result of ongoing recovery from the COVID-19 pandemic, President Joe Biden announced Wednesday that the hold on federal student loan payments and interest will continue through August 2022.
The moratorium was supposed to end on May 1.
Members of Congress have continually requested for the moratorium to continue, however Politico reports this extension is shorter than what nearly 100 Democrats, led by U.S. Sen. Elizabeth Warren, D-Mass., wanted. Last week, Warren and the lawmakers sent a letter to Biden with the request to extend the moratorium through at least the end of this year, according to the article. Democrat Lawmakers on the congressional education committee also asked for the relief be extended until 2023.
“Republicans have been urging the Biden administration to restart student loan payments over concerns about the growing cost to taxpayers. The various extensions of the payment pause have cost more than $100 billion, according to Education Department estimates,” according to Politico’s report.
The moratorium potentially affects more than 40 million Americans, according to Politico.
It also reports, “Some Biden advisers have been reluctant to continue relief because they believe it undercuts the administration’s messaging on the strength of the economic recovery, though last month White House chief of staff Ron Klain signaled the White House would extend the freeze again. Democrats and advocates for student loan borrowers have said that more relief is needed as Americans face higher costs as a result of rising inflation gripping the economy. But some economists have argued that the extension itself could add to the inflation crisis. The New York Fed warned in a report last month that it expected to see a “meaningful rise in delinquencies” on student loans when the federal relief expires.”
Meanwhile, questions remain about how much these actions would help borrowers and the economy, and what some of the other unintended consequences might be, ACA International previously reported.
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