Student-Loan Repayment Relief Extended to Jan. 31
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Here's your money briefing for Monday, August 9th. I'm J.R. Whelan for The Wall Street Journal. If you've got student loans, there's a good chance you haven't had to pay them since the start of the pandemic. The Federal CARES Act has let student loan borrowers hold off on making payments while they get their personal finances in order.
The federal government has that it saved borrowers about $5 billion a month in payments that they would have had to make. On a personal level, that's about an average $400 a month per borrower.
And on Friday, borrowers were given even more time when the program was extended. Coming up, we'll discuss the latest and look ahead to the options that borrowers have when the program does come to an end. That's after the break.
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Good news if you've got a federal student loan. On Friday, the Education Department said it was extending the moratorium on student loan payments from the end of September until January 31st, giving borrowers an extra four months before payments restart. Here with the latest is our reporter Alex Leary. Alex, thanks for coming on the show. No problem. So Alex, this relief program has been the source of ongoing debate in Washington. It's been extended previously, but these extensions haven't exactly been pushed through with a rubber stamp. So was this latest move a surprise?
Wasn't necessarily surprised. The Education Department kind of signaled that this was coming. But there has been definitely a debate on Capitol Hill. Democrats, especially more liberal ones, have been pushing for this. Republicans have not. They feel like it's time to get back to normal and have, in fact, criticized this latest extension.
Now, the Education Department said that January 31st is a, quote, definitive end date. Does that mean that borrowers shouldn't count on any more extensions?
Yes, that's right. The Education Department told us directly that this is it. This is what they consider the final extension.
And while we have you, the idea of forgiving student debt has also been talked about in Washington. Is that still on the table?
It is. President Biden has called on Congress to forgive as much as $10,000 in loans. But that's not enough for some Democrats, including Senator Chuck Schumer and Senator Elizabeth Warren, who want up to $50,000 and say no. that President Biden needs to do it through executive action, not through Congress. So that's a real debate and it's a source of tension among Democrats. And certainly after this move, you can expect to hear a lot more of that.
All right, that's Wall Street Journal reporter Alex Leary. Alex, thanks for being with us. My pleasure. Now, for student loan borrowers who currently hold $1.5 trillion in debt, Friday's move is certain to come as a relief. But what happens when the program ends? Melissa Korn covers higher education for the WSJ, and she's here to talk about it. Melissa, thanks for being with us. Thanks for having me. So, Melissa, what's been the impact of the student loan payments moratorium since it was put in place?
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