Biden extends break in student loan payments and moratorium on evictions



Borrowers attending the University of Georgia, some of whom attended this Democratic campaign rally last month, should benefit from the executive’s action.


Photo:

Joshua L. Jones / Athens Banner-Herald / Associated Press

On the first day of his term, President Biden signed a series of executive actions including two that will affect the financial lives of millions of Americans.

One orders the Department of Education to extend the break on federal student loan payments, and the other orders the Centers for Disease Control and Prevention to extend the federal moratorium on evictions. Both measures were put in place last year in response to economic hardship caused by the Covid-19 pandemic.

The Executive Order for Federal Student Loans orders the Department of Education to extend the suspension of principal and accrued interest payments for direct federal loans until at least September 30, 2021.

Loan repayments and accrued interest have been suspended for borrowers receiving federal student loans since March 13, 2020. Collection of delinquent loans has also been suspended.

More than 22 million borrowers with direct federal student loans suspended their payments during this period, according to data analyzed by Mark Kantrowitz, editor and vice president of research at savingsforcollege.com.

More than 43 million Americans collectively owe $ 1.6 trillion in federal student loans. Josh Mitchell of the WSJ explains how President-elect Joe Biden plans to help borrowers tackle that debt. Photographic illustration: Carlos Waters

Many borrowers were hoping for an executive order from President Biden that would write off some of their debt. During his campaign, Mr. Biden offered to forgive $ 10,000 in debt for every American receiving federal student loans. In recent days, Mr Biden and his transition team have said he was unlikely to use executive action for loan cancellation.

The federal moratorium on evictions will be extended until March 31, 2021. Mr Biden also calls on the Department of Housing and Urban Development to consider extending the moratorium on foreclosures and continuing forbearance requests for mortgages guaranteed by the federal government.

At the beginning of January, around 2.7 million mortgages are in forbearance according to the Mortgage Bankers Association.

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