President Joe Biden wants Congress to extend the eviction moratorium, but he hasn’t extended student loan relief for millions of student loan borrowers.
Here’s what you need to know.
Biden is calling on Congress to extend the federal eviction moratorium, which prohibits landlords from evicting tenants who don’t pay rent during the Covid-19 pandemic. The eviction moratorium, which has helped millions of Americans who are struggling financially during the pandemic, is set to expire Saturday. Last month, the U.S. Supreme Court ruled that any extension of the eviction moratorium would require an act of Congress. As Biden calls on Congress to extend the eviction moratorium, temporary student loan relief for millions of student loan borrowers is set to expire on September 30, 2021. Student loan borrowers may be wondering: “When will Biden extend student loan relief?” To date, Biden has not extended student loan relief, which means student loan payments are set to resume starting October 1. Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren have called on Biden to extend temporary student loan forbearance until at least March 2022 so that student loan borrowers have more time to recover from the Covid-19 pandemic. Schumer and Warren are concerned about impending student loan default and Warren says that student loan servicers are not prepared for student loan borrowers to make student loan payments again. Unlike the eviction moratorium, Biden doesn’t need Congress to act. Biden can extend temporary student loan forbearance through executive action, like he did in January for eight months. Why hasn’t Biden extended student loan relief? Here are some potential reasons why:
1. Student loan relief doesn’t expire until September 30, 2021, so perhaps Biden is waiting
The eviction moratorium expires Saturday. However, student loan relief doesn’t expire until September 30. Therefore, one reason Biden hasn’t extended student loan relief is that the expiration date is several months away. It’s possible that Biden is waiting until a date closer to the September deadline to make an announcement. Alternatively, Biden may wait to monitor the economy and the status of the Covid-19 pandemic. So, it’s possible that Biden extends student loan relief, even if the eviction moratorium and unemployment benefits expire. If Biden extends temporary student loan relief, here are 5 options he could pursue.
2. The eviction moratorium may be viewed as essential, while student loan relief may be viewed as optional
This may be a controversial perspective among student loan borrowers, but it’s possible that the eviction moratorium and student loan relief are viewed differently among lawmakers and the administration. For example, if the eviction moratorium isn’t extended, a significant number of families may lose their home. If temporary student loan forbearance isn’t extended, student loan borrowers may struggle financially, but the downside risk may not be as severe on a relative basis. Of course, the counterargument is that not extending student loan relief could also cause severe financial harm to families as well, which could result in some student loan borrowers having to make a difficult choice between paying student loans on one hand and paying for food or housing on the other. It’s also possible that some student loan borrowers could lose their home if student loan payments resume.
3. Student loan relief may not be extended because student loan borrowers will get $90 billion of student loan cancellation
It’s possible that Biden doesn’t extend student loan relief because student loan borrowers will have received more than $90 billion of student loan cancellation. According to the U.S. Department of Education, student loan borrowers will have received $5 billion of student loan relief each month of temporary student loan forbearance between March 2020 and September 2021. Biden also has cancelled $3 billion of student loans since becoming president. As Biden balances the interests of student loan borrowers and federal taxpayers, it’s possible that he decides not to extend student loan relief.
4. Biden may not extend student loan relief because it conflicts with a message of economic recovery
The Biden administration is focused on economic recovery amid the Covid-19 pandemic. If the economy is recovering, it may be challenging for the Biden administration to extend student loan relief. Why? On the one hand, the Biden administration wants to show that America is resilient and economic growth will continue. On the other hand, if the Biden administration extends student loan relief, it would signal that the economy isn’t recovering, student loan borrowers are struggling financially, and therefore continued student loan relief is essential. This would create a conflicting message, perhaps, from the Biden administration’s perspective. It’s the same reason why you’re unlikely to get a $2,000 a month stimulus check. The counterargument is that both can be true: the economy is recovering, but student loan borrowers are still struggling financially and it would be premature to end student loan relief during the Covid-19 pandemic.
5. Biden may believe that student loan cancellation isn’t the best way to provide financial stimulus
It’s possible that Biden doesn’t extend student loan relief given other economic priorities. For example, Biden is focused on passing his infrastructure plan in Congress. He also may consider other economic stimuli to jumpstart the economy. New research shows that student loan cancellation may stimulate the economy less than stimulus checks and unemployment insurance. Therefore, Biden could focus on other economic priorities, which could result in letting temporary student loan forbearance expire in September.
If Biden doesn’t extend student relief, make sure you have a game plan for student loan repayment. Here are some smart options to save money and pay off student loans:
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