Student Loan Debt Relief Repayment Paused
“Student loan repayment pause extended while waiting for debt relief,” (qz.com), Ananya Bhattacharya
Student loan repayments were set to restart in the new year of 2023 if not forgiven. Another six more months breathing room has been granted before those repayments start again. The US Department of Education (DoE) announced the extension on November 22.
The original moratorium was to coincide with the Biden administration’s student loan forgiveness plans for millions of former students. As announced, forgiveness would shave off up to $20,000 for each eligible borrower. The political backlash and court actions by Republicans is meant to stymie anything by Biden and Democrats. There is no logic behind these actions. Subsequent legal actions in potentially political aligned lower courts is once again blocking the debt relief program. It is a completely political act by Republicans meant to give a false alignment with those against forgiveness.
There are no other loans similar to student loans unless you are using a loan shark.
To resolve the issue, the Biden administration has now asked the Supreme Court to review his decision. In a video message, President Joe Biden said he’s “completely confident” his plan is legal. Unfortunately, I have little confidence in this court, a court which leaks its decisions to influence the public is not stable.
Payments will resume 60 days after the department is permitted to implement the program or the litigation is resolved. If neither happens by June 30, 2023, payments will resume 60 days later.
“How should economists criticize Biden’s actions on student loans?” Angry Bear, angry bear blog.
“History of Discharging Student Loans in Bankruptcy,” Angry Bear, angry bear blog
“Student Loans,” Angry Bear, angry bear blog
Is interest suspended on the debt while repayments are paused? Is repayment possible during this pause? If interest is suspended, the logic would be that volunteer repayment during the pause should be 100% principal. That could generate quite a lot of functional relief no matter if the Biden program survives or not. If interest is not suspended, what the heck kind of pause is it?
If people did pay something now, it would be to principal only.
It is even better if they pay interest as some loans require it to be paid first before touching interest. Have a good holiday!