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Student Loan Moratorium to be Extended Again?

The Biden administration is considering placing another extension on the moratorium for student-loan payments. The moratorium is currently set to close in January, however, we should know if it will be extended fairly soon, as the Education Department said it would announce at the end of the week. Going into this announcement, it is very unclear which way this will swing as White House press secretary Jen Psaki announced, “The President has not made his decision yet” during a conference this past Tuesday.

Looking Back on the Moratorium

The moratorium was originally purposed to end in September, with the decision to extend to January coming in August, cutting it very close to the deadline, similar to the situation had now. After this original extension was passed, administration officials said there would be no more extensions to the student loan moratorium.

Since then, there have been many lawmakers and activists to voice their concern over the financial burden student loan repayments would put on the recovering economy. Those speaking up include Senators Elizabeth Warren (D., Mass.) and Chuck Schumer (D., N.Y.) as well as Rep. Ayanna Pressley (D., Mass.) who stated in a letter written to Joe Biden on December 8th, that resuming collections nonstudent loan debt would force 18 million families to pay $85 billion over the next year, holding back the economy as the Omicron variant is surging.

Pleading for Relief

There was not just focus on the issues potentially caused within Warren, Schumer, and Pressley’s letter, it also called for Biden to take action by forgiving $50,000 of student debt for every borrower. This is a large additional ask as those with outstanding loans have already saved billions of dollars due to the pause being placed on interest accrual since March 13th, 2020.

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