Education Secretary Miguel Cardona said on Sunday that the Biden administration would announce in the coming days whether it would put a moratorium on student loan payments.
The announcement could also include whether President Joe Biden will sign an executive order forgiving thousands of dollars of debt per borrower. The president has been under pressure from fellow congressional Democrats to cancel up to $50,000 in debt, though multiple reports have indicated that Biden is considering a more modest plan for $10,000 in amnesty.
Student loan payments have been on hold since Congress passed the CARES Act in March 2020 in response to the COVID-19 pandemic, which closed businesses and caused millions of layoffs. Trump extended the moratorium twice, and Biden extended it four times.
The latest pause is set to end on August 31.
In an interview with NBC’s “Meet the Press” on Sunday, Cardona said: “We know that August 31st is a date that a lot of people are waiting to hear something. We talk about it daily. And I can tell you that the American people will be listening in the next week or so.
Cardona did not provide any other details about the upcoming announcement, but said, “From day one, we have been really focused on making sure that we are protecting our students and our borrowers.”
Since taking office, Biden has canceled $32 billion in student loans, mostly for students who were defrauded by schools or participated in the Public Service Loan Forgiveness program, to work in public service. cancels the loan for the borrowers.
Last week, for example, the Department of Education announced that it would cancel all remaining federal student loan debt — about $4 billion — for students attending the for-profit school ITT Technical Institute. The education department accused ITT of misleading students about its academic programs and aggressively pushing students into risky loans, and the school abruptly closed all its campuses in 2016.
According to the Federal Reserve, 48 million Americans owe a combined $1.75 trillion in student loans.
Earlier this month, a group of House Republicans introduced a bill to serve as an alternative to Democratic proposals on student loan reform. The law will focus on borrowers “most in need”, by paying the principal of the loan plus 10 years of interest to borrowers enrolled in income-driven repayment plans, providing borrowers with a way to pay back their principal if their payments are made. Occurs for 10 years only covered interest, eliminating interest capitalization that can cause balances to balloon and more.
“The Biden administration engages in massive student loan forgiveness behind the backs of Americans without the authorization of Congress,” the bill’s sponsor – Reps. Virginia Fox of North Carolina, Alice Stefnik of New York and Jim Banks of Indiana — said in a news release. “…. Instead of putting the burden of this broken student loan system on the shoulders of American taxpayers, we are introducing this bill to fix the system.