Biden Administration Grants Student Loan Borrowers a 5th Extension on Payments

"For the fifth time since the start of the COVID-19 pandemic, the Biden Administration on Wednesday extended loan forgiveness on payments by student borrowers through the end of August," University Business reports.

..."According to a March report from Consumer Affairs, nearly two-thirds of 1,200 borrowers surveyed have not made payments over the course of two years, although around half said they did. Many of those who had not paid cited reduced income, a lack of money, lost employment or a reduction in work hours as the reason for not repaying. Around one-third said they were 'hoping for future forgiveness.' Approximately 60% said they were not confident they could continue payments, with nearly 70% saying they would likely miss a future payment.

Many of those felt the government would come in and bail them out again. And it has.

Biden also addressed another pressing topic related to loan debt that has further implications on students pursuing postsecondary education-offering up a huge boost to Pell grant funding in his Fiscal Year 2023 budget. That would include an increase of $1,775 by 2023-24 and as much as $13,000 overall—Double the Pell—for borrowers by 2029. However, it still needs to be approved by Congress, which has budged only slightly in its spending on the program despite the President’s pleas.

'We applaud the Biden-Harris administration for giving borrowers who were struggling even before the pandemic the chance to course correct and get back on track with their loan payments,' said Karen McCarthy, Vice President of Public Policy and Federal Relations for the National Association of Student Financial Aid Administrators (NASFAA). 'However, these borrowers remain at high risk of falling back into delinquency and default, and the Office of Federal Student Aid must plan future efforts to keep them on track. Of course, communication leading up to the resumption of payments in September will be key for all borrowers. We urge the Department of Education to develop and roll out a smooth, efficient on-ramp to repayment.'"

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.


Publication Date: 4/6/2022

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