End of eviction moratorium could mean the end of student loan relief
The end of the federal moratorium on evictions could sound the death knell for student loan relief.
Here’s what you need to know.
The federal moratorium on evictions expired on July 31, 2021, and some progressives in Congress are in shock. How could this vital financial stimulus simply expire during the Covid-19 pandemic? There was a time when President Joe Biden may have extended student loan relief, even as the moratorium on evictions and increased unemployment benefits ended. However, with less than two months until the temporary forbearance on student loans expires on September 30, 2021, there is no clear indication that the student loan relief will be extended. The expiration of the moratorium on evictions may be a preview of what will happen to student loan relief. Here is the breakdown:
Student loan forbearance: Will Democrats extend student loan forbearance if Biden doesn’t?
Biden has the executive authority to extend the temporary forbearance of student loans beyond September 30. When Biden became president in January, he extended that student loan relief for eight months. President Donald Trump twice extended the same student loan relief after Congress passed the Cares Act – the $ 2.2 trillion stimulus package – in March 2020. Due to the Covid-19 pandemic This student loan forbearance allowed student loan borrowers to pay no federal student loan payments and set the interest rates on federal loans at 0%. However, even though Biden has executive power, that doesn’t mean he’ll use it to extend student loan relief. This hidden clue suggests that Biden will not extend student loan relief. Some Democrats in Congress were hoping Biden would extend the moratorium on evictions, but that didn’t happen either. It’s only three days Before the moratorium on evictions expired last week, Biden called on Congress to extend the moratorium on evictions. Biden, however, did not call on Congress to extend the temporary forbearance of student loans. As noted by Rep. Alexandria Ocasio-Cortez (D-NY) CNN, Republicans in Congress did not prevent the extension of the moratorium on evictions; the conservative Democrats did. With only days to reach consensus before Congress left for summer recess, Democrats couldn’t get enough support to extend the moratorium. The same would likely happen with the extension of student loan forbearance if Biden doesn’t. Like the student loan cancellation, it’s unclear whether Moderate and Conservative Democrats would even support an extension of student loan forbearance. If they did not support a bill to prevent tenants from losing their homes, it is less likely that they would support student loan borrowers in obtaining additional student loan cancellation and financial relief.
Student loan relief: legal challenges
The federal moratorium on evictions has highlighted the limits of creating financial relief without explicit authorization from Congress. In June, the United States Supreme Court ruled 5-4 not to end the moratorium on evictions instituted by the Center for Disease Control. Judge Brett Kavanaugh wrote a concurring opinion in which he said he voted not to end the moratorium as it would expire on July 31. Kavanaugh also noted that Congress is expected to pass new legislation to extend the federal moratorium on evictions beyond July 31. While Biden has the executive power to expand student loan relief, it is not clear that Biden has the legal authority to enact large-scale student loan cancellation without the express permission of Congress. If Biden cancels student loans, it could lead to legal challenges that not only could delay the implementation of the student loan cancellation, but could also result in a court ruling that Congress must pass new legislation to allow the student loan cancellation. president to proceed with a large-scale student loan. cancelation.
Student loans: what happens if student loan relief is not extended
Senator Elizabeth Warren (D-MA) has said any refusal to extend the temporary hold on student loans beyond September 30 would be catastrophic for student loan borrowers. Warren predicts countless examples of student loan defaults and defaults. Warren also says that student loan services aren’t ready for student loan borrowers to pay off student loans on or after October 1. She is one of many asking Biden to extend the student loan forbearance until 2022. Likewise, with the expiration of the federal eviction moratorium, there are similar fears that tenants who are in late monthly payments are now losing their home. Why would we oppose helping tenants on the verge of homelessness? Why would anyone oppose an extension of student loan relief if it could help delay student loan defaults? For many, one or the other political choice does not make sense. The rationale for policy makers not to expand is based on the following argument: due to the Covid-19 pandemic is not justified. This doesn’t mean that default or evictions aren’t serious issues or that student loan borrowers won’t default on their student loans. On the contrary, some policy makers believe that after more than a year of financial relief due to Covid-19, these temporary help programs should no longer be funded. Could this change? The emergence of the Delta variant and other variants of Covid-19 could alter decision-making, which could extend the temporary forbearance of student loans or re-authorize the federal moratorium on evictions. However, for now, those possibilities seem bleak.
Moratorium on evictions: where tenants are still protected
While the federal moratorium on evictions has ended, tenants still have the option of obtaining financial assistance at the state and local levels. For example, here is a partial list of states, for example MSNBC, which help bring economic relief:
- California (until October 2021)
- Hawaii (until August 6, 2021)
- Illinois (until August 2021)
- Maryland (until August 15, 2021)
- New York (until September 2021)
- New Jersey (until January 1, 2022)
- Washington, DC (until August 26, 2021)
While there are state-level student loan relief options, they are significantly lower than federal temporary student loan relief. Therefore, if the federal student loan forbearance is not extended, student loan borrowers should expect to resume student loan payments without significant state financial assistance.
Don’t expect temporary student loan forbearance to be extended. Plan as if it won’t be extended so you don’t have a financial surprise. Here are some smart options to save money:
Student loans: more reading
Student loan cancellation may help more borrowers, but that doesn’t mean Biden will cancel everyone’s student loans
Canceling student loans won’t boost economy, new study finds
Are you ready to repay your student loans again? Elizabeth Warren Says Your Student Loan Officer Isn’t Ready
Is it a game-changer for student loan cancellation?