The final decision on whether the Biden administration will waive some student loans will probably not come until July or August, administration officials said. The Wall Street Journal.
The president said in late April that he would make the decision “in the next few weeks.” Since then, the administration has not made any official announcement on massive debt relief. On Monday, James Kowal, the undersecretary of education, said at an event hosted by the Bipartisan Policy Center that the administration was still considering how many student loans should be canceled and who would be eligible under the loan waiver proposal.
Kvaal added that he had no idea if there would be another break in the repayment of the loan.
White House officials say Biden is considering forgiving about $ 10,000 student loans per borrower for all borrowers earning under $ 150,000 a year, a statistic many debt advocates say is too small to cope with the debt crisis.
The news includes a letter signed by more than 500 labor and civil rights organizations pushback urging Biden to cancel the student loan immediately.
Mike Pierce, executive director of the Student Borrower Protection Center, said he believed the Biden administration could consider a larger relief package because of the pushback.
“I’m optimistic because the White House received a message from the student loan man and his lawyers after updating the first version of the proposal a few weeks ago,” Pierce said.
According to Journal, There is skepticism within the administration about Biden’s ability to use executive authority to relieve student debt. In addition, the Department of Education is concerned about the administrative burden that comes with implementing a new federal program and applying for a debt waiver for millions of Americans.
Under the Federal Student Loan Pause, borrowers have not had to pay for their loans since March 2020, and many debt relief advocates worry that borrowers will be able to adjust to the increased costs without taking any further breaks before taking action on biden loans. Sorry
“Just a few weeks from now, 45 million people find themselves in a place where they don’t know what their family’s finances will be like,” Pierce said. “Every bit of extra financial breathing room is important.”
However, no matter how much the Biden administration chooses to forgive the debt, the plan will not be implemented immediately. According to Scott Buchanan, executive director of the Student Loan Servicing Alliance, “No matter what you announce, it won’t happen overnight. It’s just a big process. “
Buchanan said lenders who manage loans provided by the federal government should take the time to figure out how to implement their debt relief so that borrowers can see the impact of any administration action on student loans.