Confirmed: Biden’s extension of student loan freeze will continue to count towards loan forgiveness

Confirmed: Biden's extension of student loan freeze will continue to count towards loan forgiveness

President Joe Biden signed an executive order on Wednesday afternoon directing the Department of Education to extend the current moratorium on student loan payments, interest and collections. It was one of Biden’s first official acts as president after his inauguration. In April last year, Congress passed the CARES Act in response to the growing economic devastation caused by the COVID-19 pandemic. The law provided relief to borrowers with federal student loans held by the government by suspending their payments, freezing the accumulation of interest and halting all collection efforts on delinquent loans. The moratorium was originally scheduled to expire last year, but the Trump administration has subsequently extended the relief twice. The most recent expansion was due to expire on January 31. This afternoon, President Biden signed an executive order extending the current moratorium “at least” to September 30, 2021. It could be extended further, depending on economic conditions at the time. In the evening, the Ministry of Education had updated its site Web and confirmed that Biden’s extension of the student loan freeze would continue to qualify borrowers for major student loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF), as well as the Federal Student Loan. rehabilitation programs. “If you have a direct loan and work full time for an eligible employer during the suspension, you will receive a credit to PSLF… for the period of suspension as if you had made one-time monthly payments of the correct amount during a repayment plan” , says the Ministry of Education. Payments will also continue to be factored into federal loan rehabilitation programs. The cancellation of student loans was not included in Biden’s decree, as progressive advocates had hoped. Biden has indicated he will rely on Congress to prepare and pass additional student loan reforms. Meanwhile, the extended moratorium will provide millions of student loan borrowers with immediate additional relief, while giving lawmakers time to develop additional student loan proposals.

Highlights

  • According to Forbes, “Confirmed: Biden’s extension of student loan freeze will continue to count toward loan forgiveness.”
  • In April last year, Congress passed the CARES Act in response to the growing economic devastation caused by the COVID-19 pandemic. The law provided relief to borrowers with federal student loans held by the government by suspending their payments, freezing the accumulation of interest and halting all collection efforts on delinquent loans. The moratorium was originally scheduled to expire last year, but the Trump administration has subsequently extended the relief twice. The most recent expansion was due to expire on January 31.

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