Biden extends hiatus on student loan payments. What there is to know

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President Joe Biden orders the Department of Education to extend the suspension of federal student loan payments until September 30.

President Joe Biden orders the Department of Education to extend the suspension of federal student loan payments until September 30.

President Joe Biden has called on the Department of Education to extend the suspension of federal student loan payments a few days before the expected expiry of the moratorium.

“Too many Americans are struggling to afford basic necessities and provide for their families,” he added. the Department said Wednesday in a statement. “They shouldn’t have to choose between paying off their student loans and putting food on the table.”

Congress adopted a coronavirus relief plan in March 2020 that suspended student loan payments until September. The benefit was extended by the administration of former President Donald Trump until January 31.

During the election campaign, Biden said he supported the $ 10,000 cancellation of federal student loan debt per person. Incoming Director of the National Economic Council Brian Deese said the Biden administration still supports forgiveness up to $ 10,000 per borrower, The Washington Post reported.

Biden proposed a income based repayment plan in which Americans who earn more than $ 25,000 a year would spend 5% of their discretionary income on their loans and after 20 years their loans would be canceled. People who earn less than $ 25,000 a year are not expected to make any payments on their loans.

Biden’s plan also offers two years of free community college and to make public colleges and universities free for families with incomes below $ 125,000.

Biden has come under pressure from other Democratic lawmakers to pass more student debt relief.

Senate Majority Leader Chuck Schumer introduced legislation with Democratic Senator Elizabeth Warren of Massachusetts, calling on Biden to cancel $ 50,000 in student debt per person on his first day in office.

“We have come to the conclusion that President Biden can write off this debt, can write off $ 50,000 in debt on the first day he becomes president,” Schumer said in December, CNBC reported. “You don’t need Congress; All you need is a stroke of a pencil. “

House Democrats led by Maxine Waters of California, Ayanna Pressley of Massachusetts, Ilhan Omar of Minnesota and Alma Adams of North Carolina introduced similar legislation in December.

Last year, federal student loan debt nearly $ 1.6 trillion, according to the Federal Reserve Bank of New York. More … than 40 million Americans have student loan debt, according to Politico.

This story was originally published January 21, 2021 11:24 am.

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Summer Lin is McClatchy’s real-time reporter. She graduated from Columbia University School of Journalism and was previously a news and policy writer for Bustle News.


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