Biden Administration extends student loan relief into 2022

August 8, 2021

Biden Administration extends student loan relief into 2022

The Biden administration announced on Friday that they would be extending the student loan relief package into 2022. Former students with loans are happy about this ruling, but there has been pushback from lawmakers claiming that this is just keeping people out of the workforce.

This will be the final student loan relief extension which began because of COVID-19. The pause will run through January 31, 2022.

Details of the extension

Finances have been tight for many students because of COVID-19. The virus forced many people to lose their jobs, but the economy is reopening. However, the looming delta variant is an indication that the shutdowns may return in the future.

This decision by the Biden administration gives the nation an idea of the president’s plan on how to handle COVID 19. The Department of Education broke the news to the public on Friday.

Education Secretary Michael Cardona released a statement where he said, “This will be the final extension of the pause on student loan repayment, interest, and collections. The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency.”

He claimed that the decision was necessary for this tough time because people are still hurting from the virus. The department believes that Americans need more time to handle the devastation of the pandemic.

Student loans can take a lifetime to pay off, so this decision affects more than young adults directly out of college who are beginning to pay loans. It primarily deals with people who have loans to pay off and families to take care of in a difficult time for the United States.

Cardona went onto say, “As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment. It is the Department’s priority to support students and borrowers during this transition and ensure they have the resources they need to access affordable, high quality higher education.”

The pause on payments was set to expire in October, but the department vetoed this date.

Conflicts Amongst Lawmakers

There have already been billions in relief paid by the Biden Administration. This is great for struggling Americans currently, but these bills still need to be paid in the future. There have been critiques by Republicans and Democrats saying that the stimulus checks have put the nation in a detrimental hole for the future.

Liberal lawmakers are trying to continue with relief despite the economy opening. Lawmakers like Alexandria Ocasio-Cortez want to provide student debt relief up to $50,000. This is equivalent to a full year at a private institution.

Even though students’ debt would be absorbed if this legislation passed, the government would still have to foot the bill causing taxes to soar. The government just relieved $1.5 billion in borrower claims within this ruling, so that’s money that must be paid in the future.

COVID-19 has put the country in a financial hole, but eventually, bills need to be paid. This will hurt Americans because of future tax rates that must be implemented to impede the debt from the Biden Administration.

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