Student loans: Biden administration extends pause on interest and collections amid COVID-19 pandemic
“This measure protects in particular 800,000 borrowers who risk having their tax refunds seized,” Psaki said during a White House briefing.
The pause on collections covers loans made under the federal family education loan program. It does not apply to borrowers who are not in default.
Biden has resisted calls from top Democrats in Congress – including Senate Majority Leader Chuck Schumer and Massachusetts Senator Elizabeth Warren – to use his executive power to write off $ 50,000 in federal student loan debt per borrower .
But Biden, who has said he would support the cancellation of $ 10,000 per borrower, has repeatedly argued that the government should not write off the debt of people who went to “Harvard and Yale and Penn.” He also said he believed Congress should make changes through legislation, which would make them more difficult to overturn, although Psaki said on Tuesday that the White House “is still looking more closely at our options on student loans “.
“This includes examining the authorities at our disposal, existing loan forgiveness programs that are clearly not working as well as they should,” Psaki said.
Psaki continued, “This includes the borrower’s defense, total and permanent disability charges, there are a lot of steps that we are looking at and we will continue to review them and be in touch with Leader Schumer on the subject. of our process. “
A blanket forgiveness of federal student loan debt would be unprecedented. But a note from attorneys at Harvard Legal Services Center and its Predatory Student Loans Project says the Education Department has the power to do so.
The ministry has already put in place more targeted debt cancellation policies. It clears the debt of defrauded students as well as disabled veterans. Biden could provide relief to hundreds of thousands of additional borrowers just by expanding these programs, according to the National Student Legal Defense Network.
In one of his first acts in office, Biden extended the hiatus on student loan payments and interest, a Covid relief benefit put in place by Congress last year that had already been renewed by the administration Trump. Federal student loan borrowers will not be required to make payments until October 1 at the earliest.
And the administration earlier this month rolled back a controversial Trump-era policy that will lead to the cancellation of around $ 1 billion in student debt for borrowers defrauded by their colleges.
The change will offer a full loan cancellation to 73,000 people who were deemed eligible for relief under former education secretary Betsy Devos, but who only received a partial loan cancellation after changing the calculation. cancellation.
Last week, the administration waived a paperwork requirement during the pandemic for borrowers with disabilities to receive approval to cancel their loan. But advocates say much more could be done to help these borrowers, such as automatic debt settlement.
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