Current student loan news for the week of June 28, 2021
In the ever-changing world of student loans, it is essential to stay abreast of current events and student loan rates. Below are this week’s student loan trends that could affect your loans – and your wallet.
2 current trends in student loans for the week of June 28, 2021
1. Democratic lawmakers call for an extension of the student loan forbearance period
Senator Elizabeth Warren, Senator Chuck Schumer, Representative Ayanna Pressley and Representative Joe Courtney sent a letter to the Biden administration calling for an extension of the student loan interest and the payment break, which is currently due to expire September 30. 2021. The letter is signed by dozens of Democratic lawmakers.
In the letter, lawmakers are calling for the forbearance period to be extended until March 31, 2022, or until the economy reaches pre-pandemic employment levels, whichever is longer. They argue that even if the economy begins to improve, the extension is necessary for borrowers who have been most affected over the past year: “Women and people of color have been disproportionately affected by the pandemic, which some experts have considered a recession in modern US history, ”and they have recovered at a slower pace.
The rescheduled payments in October would cause a significant and unnecessary slowdown in the economy, they write, as the possible wave of delinquent federal student loans would cause long-term credit damage and hurt the financial health of borrowers. Although the government offers reimbursement alternatives, such as income-based reimbursement plans, the letter criticizes the accessibility of these plans, saying the registration process is long and complex and agents will be overwhelmed by the flood. potential borrowers having to register once the repayment break ends.
How it affects student loans
The Biden administration is already evaluating the end of the administrative abstention. Education Secretary Miguel Cardona said in May that an extension would depend on the state of the economy at the time. “[An extension is] not out of the question, but at this point it is September 30, ”he told an Education Writers Association conference.
If you’re worried about restarting payments, it’s best to start planning now and act like an expansion isn’t coming. You may want to start preparing to apply for an income-based repayment plan or standard forbearance. In some cases, you might also be wondering whether it makes sense to refinance your loans with a private lender for a lower monthly payment.
2. US Department of Education Holds Public Hearings on Student Loan Cancellation Programs
The US Department of Education held three-day online public hearings last week, allowing stakeholders to comment on 14 topics related to student loan cancellation. Commentators could also make recommendations on how the current student loan legislation could be improved.
The hearings were specifically intended to address the changes made to student loan programs by the Trump administration. Under this administration, many borrowers found it more difficult to qualify for a student loan forgiveness thanks to programs such as the borrower’s defense against repayment.
These hearings will help shape future student loan rules and regulations to make it easier for borrowers to qualify for programs such as civil service loan forgiveness. Written comments will be accepted by the Department of Education until July 1.
How it affects student loans
If a consensus was reached after these hearings, the Department of Education could revise the wording of the regulation of student loans. The Biden administration has expressed interest in implementing changes to civil service loan forgiveness, full and permanent disability release and more; any adjustment to these programs could help more borrowers qualify for the student loan exemption.
Whether you’re new to student loans or already in advanced repayment, it’s wise to stay on top of how your student loan rates might change. As 2021 continues, more opportunities for cheaper loans or loan cancellation may open up; Keep an eye on the Bankrate student loan news center for the latest trends.