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There is mounting evidence that student loan borrowers may have more time before having to resume payments.

Most borrowers have had their bills on hold for more than 16 months, thanks to a break offered by the U.S. Department of Education due to the financial troubles caused by the Covid-19 pandemic. Currently, these payments are scheduled to start again in October.

However, an extension has been considered, say experts.

"There is a lot of discussion about what to do here," said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trading group for loan service companies and their affiliates.

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A recent change in student loan processing could work in favor of borrowers.

The Pennsylvania Higher Education Assistance Agency – which oversees the loans of 8.5 million student borrowers – announced this month that it will not renew its contract with the federal government if it ends in December. All of these borrowers therefore need to be matched with a new lender.

"It would be confusing for PHEAA borrowers to resume repayment on September 30th only to change administrators on December 14th," said university expert Mark Kantrowitz.

"It would be better to combine both changes so that they occur at the same time."

There were already signs that the White House is considering an extension.

In an interview with the Education Writers Association in May, Education Minister Miguel Cardona said the government was deciding whether to give borrowers more time beyond September.

Meanwhile, Democrats and supporters are pushing for an extension.

Senator Elizabeth Warren, D-Mass., And Senate Majority Leader Chuck Schumer, DN.Y., sent a letter to President Joe Biden in June asking him to keep the payment hiatus in effect through March 2022. That would mean that most borrowers would have made no payment on their student loan in two years.

More than 120 organizations, including the American Civil Liberties Union, the National Consumer Law Center, and the Consumer Federation of America, also recently wrote to the president asking him to extend the debt break until the student debt is canceled.

Maintaining the hiatus until a decision about forgiveness is made would reduce confusion for borrowers and service providers alike, experts say.

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Biden has asked the US Department of Justice and the US Department of Education to review his legal authority to cancel student debts through executive action. These reports are still pending.

The decision on when to resume payments may also depend on how borrowers fare if the country pulls out of the pandemic.

Those with college debts struggled before Covid, with more than 1 in 4 defaulting or defaulting. After more than a year of record unemployment, this pain has only worsened.

The unemployment rate for people with an associate degree was more than 5% in May, compared to 2.8% before the pandemic. Almost 3% of Bachelor graduates remain unemployed, compared to around 2.2% before Covid.

The Congressional Budget Office recently forecast that the unemployment rate among younger workers will improve more slowly than the overall rate.

"The best guess is that the payment break and the interest waiver will be extended if the unemployment rates for university graduates have not normalized as of September 30, 2021," said Kantrowitz.

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