Are You REALLY Ready For The End Of The Student Loan Deferment Program?
(IntegrityMag.com) – Student debt has been a bone of contention in Washington, D.C. for a while now. Some Democrats, potentially including President Joe Biden, want to offer indebted students and graduates permanent relief from their debts in the form of student loan cancellation.
On a more temporary level, student borrowers have enjoyed a deferment program since the beginning of the pandemic. However, as that draws to a close, millions of Americans are now preparing to start making repayments once again. Here’s everything you need to know.
The COVID-19 Student Loan Deferment Program
The CARES Act introduced a pause on student loan repayments in March 2020. Amid ongoing uncertainty about the longevity of the pandemic and its related economic effects, the Trump and Biden administrations extended the deferment multiple times. But on May 1, 2022, following the final extension at the beginning of the year, it will come to an end.
Until that date arrives, student borrowers won’t have to make repayments on either interest or principal amounts arising from their loans. However, the months of suspension will continue to count for the purposes of federal debt forgiveness programs, such as Public Service Loan Forgiveness (PSLF), as if payments were ongoing, meaning interest continues to accrue.
Important changes are coming in terms of the PSLF program, too, as the Department of Education is in the process of changing loan service providers for the scheme. Any borrowers to whom the PSLF program applies will have their loans switched from the old service provider to a new one at some point in 2022.
What About Permanent Student Loan Forgiveness?
Joe Biden has indicated he might favor permanently erasing debt for at least some students, graduates and college dropouts. The idea also has support from some senior Democrats in Congress, most notably Senator Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY). They argue that getting rid of student debts would be fairer for people who did not realize significant benefits from their expensive third-level educations.
However, it has its opponents within liberal ranks too. House Speaker Nancy Pelosi (D-CA) surprised many analysts last year when she announced she was against the idea and didn’t believe Joe Biden had the authority to cancel student debt via executive order.
Many GOP lawmakers are also firmly against the idea of student debt cancellation. They believe it’s unfair to require taxpayers, who may not have gone to college themselves, to shoulder the burden of repaying the arrears of those who did.
What do you think? Should we cancel student loans?
Copyright 2022, IntegrityMag.com