The US Department of Education has extended a hiatus on student loan payments that was scheduled to expire at the end of the month.
The abstention period, which was to end on January 31, was extended until September 30 following a request from President Joseph R. Biden Jr.
Under forbearance, federal student loan interest rates are set at zero and student loan payments and collections have been suspended.
“Too many Americans are struggling to afford basic necessities and provide for their families,” the department said in a statement. declaration announcing the extension. “They shouldn’t have to choose between paying off their student loans and putting food on the table.”
While forbearance is more important for graduates and alumni who have already started repaying their financial aid, current UC students may still enjoy some benefits.
âStudent loan borrowers can now continue to enjoy an automatic interest-free pause on payments until September 30, 2021 on federal student loans,â said Dave Peterson, assistant vice-president overseeing the student financial aid, in an emailed statement to The News Record.
“This relief does not extend to private student loans,” he added.
According to The data from the Department of Education, up to 55% of undergraduates receive federal student aid.
Students attending four-year public universities took on an average of $ 7,500 in student loans, the data showed. Full-time, financially independent students take out more loans – on average $ 10,200 – than students who still depend on the income of their parents or guardians.
But just because UC students who have accepted federal aid and are still enrolled in courses get a cut in their interest rates, doesn’t mean they should. defer payment of their balance, according to Peterson.
âMy recommendation is that federal student loan borrowers continue to pay off their student loans to reduce the principal balance and save money on interest,â he said. “Additionally, federal student loan borrowers should contact their student loan officers and review existing student loan repayment options after September 30, 2021.”
According to a Washington Post report, Capitol Hill Democrats are seeking to write off up to $ 10,000 in student loan debt through congressional legislation.
Given the party’s slim majority in the Senate, it is uncertain whether such legislation will be successful.