Here Come Those Student Loan Payments Again, Falling On Your Head Like A Memory
The most recent pandemic extension of the moratorium on student loan payments is set to expire at the end of the month, and so far at least, the Biden administration hasn't said whether another extension will be put in place. The fact that there hasn't been any guidance issued yet, with just two weeks until the end of the pause, has some analysts thinking that another extension is likely, because, in technical terms, yowie, as CNBC explains.
“The fact that they haven’t issued any guidance so close to the theoretical start date pretty much indicates yet another payment freeze is inevitable,” said Barmak Nassirian, vice president for higher education policy at Veterans Education Success, an advocacy group.
Gosh, do you suppose the administration might extend the payment freeze one more time before the midterm elections, at a moment when news is finally looking really good for Biden? Don't go spending your planned loan payment on penny whistles and moonpies because we say it, but we think there might be another extension. Pure speculation on our part.
Stand By, For Student Loan NEWS
(We were doing Paul Harvey there. Do you remember Paul Harvey?)
Education Secretary Miguel Cardona told CBS News on Tuesday that borrowers will "know directly and soon from us" when a decision is made. The lateness of the announcement may have something to do with whether the Biden administration has reached a decision on forgiving some amount of student debt — probably $10,000 per borrower — which was also supposed to be announced before the end of the current pause, as then-Press Secretary Jen Psaki said in April.
Again, Yr Wonkette is prepared to speculate that Biden just might announce some form of student debt forgiveness but there's maybe some disagreement in the White House as to how much it should be. We say "ALL OF IT," knowing exactly how much influence this little mommyblog has on federal policy.
Also too, WUSA-TV notes that
In late July, the Department of Education told student loan servicers not to contact borrowers about resuming payments, the Wall Street Journal and NBC News reported, signaling an extension of the pause is likely.
The CEOs of at least two financial companies are preparing for the moratorium to last until at least January 2023. In second quarter earnings calls, the heads of Navient and SoFi both said they expect Biden to extend the pause and were factoring that into business forecasts, though it's important to note neither company services federal student loans for the Department of Education.
"It's hard for us to believe that it does not get extended," Navient CEO Jack Remondi told an analyst.
Again, we won't know until there's an announcement, but that's probably on the way soon. Or maybe the administration will just say, nah, time to suddenly start paying student loans again when inflation is already a top issue in the midterms.
Also too, a quick couple of related Student Debt Nice Times, which is not a four-word combination we type very often:
More Help For Students Ripped Off By Ripoff For-Profit 'Colleges'
For starters, the Education Department announced Tuesday that it will be doing another round of debt cancellation for students who were defrauded by a for-profit college-like institution, wiping out nearly $4 billion in debt owed by 208,000 borrowers, hooray and also go suck eggs, Betsy DeVos.
All remaining students who attended the now-defunct ITT Technical Institute between Jan. 1, 2005, through its closure in September 2016, including those who have not submitted a borrower defense claim, will have 100% of their loans canceled. Borrowers who qualify for the relief will not need to take any additional action to receive the funds.
“It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises,” Education Secretary Miguel Cardona said in a statement. “The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause.”
Personal note: I must confess I taught for a year or so at the ITT Tech outlet in Boise, where I actually tried to teach students first-year college writing and also business communication. I can state unequivocally that it wasn't the instructors who were getting rich off the fraud.
Also Help For Borrowers In Default
The Washington Post reports (paywall-free gift linky) that the Biden administration will be rolling out a plan to help people who've defaulted on federal student loans get that fixed so that they can once more qualify for student aid and have the default removed from their credit history.
Anyone now in default on a federal loan made directly by the Education Department, Perkins loans held by the agency and old bank-based debt held by the department or private companies, is eligible for the program. Their eligibility for federal Pell grants, work-study and loans will be reinstated, according to a fact sheet shared with Congress and advocacy groups this week.
The administration announced the "Fresh Start" program this spring, and the Post reports that the Education Department plans to get the program up and running "ahead of the fall semester so students can benefitas soon as possible." A "Dear Colleague" letter went out from the Education Department Wednesday with specifics on how it'll work for students who defaulted before or after the pandemic loan repayment freeze started in March 2020.
This is really a big damn deal!
You can find information on the Fresh Start program straight from the Ed Department at the Federal Student Aid website, which will be updated as the program is put in place. The Post has a brief summary of how it'll work, too:
People will have one year from the end of the student loan payment pause — set to expire Aug. 31 — to make payment arrangements. Failure to act will throw borrowers back into default and deny them many key benefits of the temporary program.
During the one-year period, all defaulted borrowers with eligible loans will not be subject to any collection efforts, such as having their wages garnished or tax refunds seized to repay their student loans, according to the [Education department] fact sheet.
Now, if the payment pause is renewed, we'd assume that the one-year deadline to make payment arrangements would also be extended, since the pause is part of the emergency measures related to the pandemic, but anyone wanting to take advantage of Fresh Start would definitely want to double check the details if and when the pause is extended.
So there you go, some actually pretty good news on student loans for a change! Thanks a lot, Biden.
Yr Wonkette is funded entirely by reader donations. If you can, please help us — OK, some of us — keep Navient at bay with a $5 or $10 monthly donation.
Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.