LOVELAND MAGAZINE

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Since 2004

Tag: student loan debt

  • Pause on federal student loan repayments extended by Biden through Aug. 31

    Pause on federal student loan repayments extended by Biden through Aug. 31

    BY: ARIANA FIGUEROA – Ohio Capital Journal

    The Biden administration Wednesday announced its plans to extend the pause on federal student loan repayments until the end of August.

    “I recognized in recently extending the COVID-19 national emergency, we are still recovering from the pandemic and the unprecedented economic disruption it caused,” President Joe Biden said in a statement. 

    “If loan payments were to resume on schedule in May, analysis of recent data from the Federal Reserve suggests that millions of student loan borrowers would face significant economic hardship, and delinquencies and defaults could threaten Americans’ financial stability.”

    The White House will extend the deadline for student borrowers to pause on federal loan repayments, interest, and collections until Aug. 31. The announcement also provides a “fresh start” on loan repayments by removing any prior defaults to allow those borrowers to re-enter repayment in good standing.

    The current pause would have ended on May 1.

    “The Department of Education is committed to ensuring that student loan borrowers have a smooth transition back to repayment,” U.S. Secretary of Education Miguel Cardona said in a statement. 

    “This additional extension will allow borrowers to gain more financial security as the economy continues to improve and as the nation continues to recover from the COVID-19 pandemic.”

    Cristina Tzintzún Ramirez, the president of NextGen America, an organization that mobilizes young voters, released a statement calling the announcement “another short-term fix to a crisis that demands a long-term solution.”

    “Young voters feel frustrated with President Biden’s failure to fulfill his promise on student debt cancellation,” Tzintzún Ramirez said. “While borrowers surely appreciate the help paying rent and making ends meet, what they really need is a debt cancellation that will allow them to buy a house and build a future.”

    During Biden’s campaign for the presidency, he pledged to cancel student loan debt during a town hall in Miami.

    “I’m going to eliminate your student debt if you come from a family (making less) than $125,000 and went to a public university,” he said, according to Black Enterprise.

    Biden has since called on Congress to pass legislation to cancel up to $10,000 of student debt, but many congressional Democrats argue that Biden could reduce debt through an executive order. They’ve pushed him to cancel up to $50,000 in student loan debt.

    The Federal Reserve estimates that the total U.S. student loan debt is more than $1.75 trillion. The Department of Education owns about 92% of that student loan debt.

    Democrats push for debt cancellation

    A handful of U.S. Senate and House Democrats released a joint statement that said they welcomed the extension, but stressed the need to cancel student loan debt.

    “While the extension is welcome, a looming restart of student loan payments in September underscores the importance of swift executive action on meaningful student debt cancellation,” they wrote. “We continue to implore the President to use his clear legal authority to cancel student debt, which will help narrow the racial wealth gap, boost our economic recovery, and demonstrate that this government is fighting for the people.”

    Those lawmakers include Sens. Elizabeth Warren of Massachusetts, Chuck Schumer of New York, Alex Padilla of California and Raphael Warnock of Georgia, as well as Reps. Ayanna Pressley of Massachusetts, Ilhan Omar of Minnesota, Pramila Jayapal of Washington, and James E. Clyburn of South Carolina.

    The chair of the House Education and Labor committee, Rep. Bobby Scott, released a statement in which he did not call for the cancellation of student debt, but praised the administration for its decision to continue the pause.

    “By extending the pause on student loan repayments, collections, and interest accrual, the Biden-Harris Administration has demonstrated that it remains committed to helping borrowers get back on their feet,” the Virginia Democrat said.

  • Continued student loan debt pause could help many Ohioans

    Continued student loan debt pause could help many Ohioans

    BY: SUSAN TEBBEN and Ohio Capital Journal

    With Ohioans carrying millions of dollars in student loan debt, it may come as a relief to many that the U.S. Department of Education announced a “final” extension on pausing student loan repayment.

    The federal agency said the extension will last until Jan. 31, 2022, which President Joe Biden’s administration said is a “definitive end date” to allow those with student debt to prepare to start paying again after that date.

    The pause came as the coronavirus pandemic caused job losses and an economic slowdown throughout the country. The student loan payment system was supposed to start collecting again at the end of September, according to the previous extension guidelines.

    “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,” said U.S. Secretary of Education Miguel Cardona in a statement.

    In Ohio, accounts earlier this year showed a total of $745.8 million in loans — federal and non-federal — that had been taken out by public university students. The Ohio Department of Higher Education says average tuition and mandatory fees at the state’s university main campuses for fiscal year 2021 is $10,076 per year.

    According to Forbes, the overall student debt in the country was $1.56 trillion in 2020. Disparities are present in the student debt numbers as well. According to a 2021 report by the American Association of University Women, women hold an average of $31,276 in student debt, and because of wage disparities, women take “about two years longer than men to repay student loans,” according to the AAUW study.

    The federal extension includes not only continues a suspension in loan payments, but also a stoppage on accrued interest and collections for defaulted loans.

    Student debt has been a hot button issue in the state and nationally as loan forgiveness became a key talking point during the 2020 presidential election. Biden maintained his insistence that he wouldn’t be forgiving student loans all together, as some of his fellow presidential candidates had said they would.

    A student loan debt advisory group convened in 2017 said the state’s debt certification process, which goes through the state Attorney General’s office, was inefficient because it relied on “varying policies and practices” by the state’s colleges and universities.