Secretary of Education Betsy DeVos extended the federal government’s moratorium on mandatory federal student loan payments, postponing the deadline for the third time since Congress passed the first major COVID-19 relief package back in late March.
Under the new forbearance period, Americans with federal student loans can put a halt to mandatory payments until January 15, five days before inauguration day. Interest payments will also be set to 0% for two months, and collections on defaulted federal student loans will also be temporarily suspended.
“The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been impacted,” said DeVos in a statement Friday evening. “The added time also allows Congress to do its job and determine what measures it believes are necessary and appropriate. The Congress, not the Executive Branch, is in charge of student loan policy.”
Back in March, DeVos pushed for a 60-day forbearance period, which was later extended by Congress through the CARES Act until the end of September. President Donald Trump extended it again in early August until the end of December after Democratic lawmakers and Trump administration officials failed to reach another relief agreement.
Since then, Congress has not agreed on terms for another COVID-19 relief package.
Following the election, Democratic presidential candidate Joe Biden has been facing pressure from Democrats to cancel student loan debt as a form of COVID-19 relief.
Senator Elizabeth Warren (D-MA) published an op-ed in The Washington Post last month calling for “bold policies” to respond to the pandemic, such as taking unilateral executive actions to “cancel billions of dollars in student loan debt.”
Warren argued that doing so would give “tens of millions of Americans an immediate financial boost … helping to close the racial wealth gap. This is the single most effective executive action available to provide massive consumer-driver stimulus.”
Senate Minority Leader Chuck Schumer (D-NY) recently said he wants to see “the first $50,000 of debt be vanquished” through execution action, reports CNBC.
Ahead of the Thanksgiving holiday, Biden said he wanted Congress to forgive $10,000 in private, non-federal student loan debt for Americans immediately, because people are “having to make choices between paying their student loan and paying the rent.”
Steve Forbes recently argued on Fox News that having the federal government forgive student loan debt would make “people who paid their debts, took their obligations seriously, look like fools.”
“The very government programs, studies have shown … that are supposedly helping students, instead lead to higher tuitions. The universities get the money, they add administrative costs, and the students get stuck and their families get stuck with debt and in some cases grants, but with higher debts,” he added. “So, the universities get the money and students [get left] holding the bag. So, you got to stop that corrupt gravy train of more and more and more money going to the universities and students getting stuck with the debt.”