Federal student loan forbearance not extended in COVID-19 stimulus bill
WASHINGTON (Gray DC) – The $ 900 billion, 5,593 page stimulus bill fails to solve student debt. Millions of student loan borrowers could be required to resume federal student loan payments on February 1.
In March, Congress passed the CARES Act, which provided for federal forbearance on student loans, waived interest, and stopped collections on overdue loans until September 30.
In August, President Donald Trump signed a presidential memorandum extending student loan relief until December 31. Then, earlier this month, Education Secretary Betsy DeVos extended the deadline to January.
From now on, federal student loan borrowers will have to repay on February 1. But, according to Betsy Mayotte of the Institute of Student Loan Advisors, there is a chance that President-elect Joe Biden could intervene after the inauguration.
“We think President Joe Biden is going to extend, it’s just a matter of when,” Mayotte said.
At the end of the forbearance period, Mayotte says it expects high delinquency rates.
“Borrowers have lost the habit of repaying,” Mayotte said. If you look at the research, a great indicator of the success of long term student loan management is simply the habit of making a payment. Now all the borrowers are out. “
According to the Federal Reserve, Americans face $ 1.7 trillion in student debt. There are several other measures designed to help borrowers floating around Washington.
Senator Tammy Baldwin (D-Wis.) Has sued the crooks in her recent bill. the Stop Ac Student Debt Relief Scamst will strengthen law enforcement and administrative capacity to identify and stop student debt relief scams. The legislation has been passed by both the House and the Senate and awaits the President’s signature.
“When you start a new government program, it’s almost a signal to scammers and crooks to say, ‘Oh, we’re here to help you,’ but they’re only here for their own financial gain,” Baldwin said. .
During the election campaign, President-elect Joe Biden backed a proposal to write off $ 10,000 in federal debt per person. However, Mayotte says borrowers shouldn’t anticipate forgiveness.
“Borrowers shouldn’t make financial decisions based on the fact that there might be relief at some point,” Mayotte said.
She suggests that you take advantage of the forbearance period and discuss refinancing options if necessary.
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