Biden expands pause on student loan interest and collections

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President Biden is lengthening a pause on federal student loan debt collections after the Department of Education announced on Monday that it would provide debt relief for borrowers with total or permanent disabilities, the White House said Tuesday. 

“We will be expanding the pause on student loan interest and collections to the more than 1 million borrowers who are in default on a loan that was made by a private lender in the old bank-backedloan program, known as the Federal Family Education Loan Program,” White House press secretary Jen Psaki said at her daily briefing. 

She said it would protect 800,000 borrowers at risk of having their federal tax funds seized. 

Psaki also called on Congress to cancel $10,000 in student loan debt. 

“That’s something Congress could take an action on and he’d be happy to sign. We’re still taking a closer look at our options on student loans. This includes examining the authorities, we have, the existing loan forgiveness programs that are clearly not working as well as they should,” she added.

“This includes borrower defense, total and permanent disability charges, there’s a lot of steps we’re looking at and we’ll continue to review,” Psaki said.

After Education Secretary Miguel Cardona’s announcement on Monday, Senate Majority Leader Chuck Schumer and other Democratic senators renewed calls on the president to cancel $50,000 in student loan debt.  

“So we have very good news for so many people who have student debt, the load of student debt on their shoulders. … We’ve made another good step forward on our progress,” Schumer said in a press conference attended by Sens. Elizabeth Warren of Massachusetts and Bob Menendez of New Jersey. 

Warren also urged Biden to take action.

“This is about moving forward, this is our moment of momentum. We have gotten one more piece in place and now we’re just ready for President Biden to sign the piece of paper to say ‘cancel $50,000 worth of student loan debt,’” Warren said. 

The move by Cardona would help more than 230,000 borrowers, including 41,000 people who have had loans reinstated during the coronavirus pandemic and will be refunded for any payments made. 

The entire group will not be asked to provide earnings documentation during the duration of the pandemic. 

“Borrowers with total and permanent disabilities should focus on their well-being, not put their health on the line to submit earnings information during the COVID-19 emergency,”  Cardona said in a statement.

“Waiving these requirements will ensure no borrower who is totally and permanently disabled risks having to repay their loans simply because they could not submit paperwork,” he said.

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