On his first day in office, President Joe Biden will order the Education Department to extend the moratorium on federal student loan payments that would otherwise expire at the end of January, according to David Kamin, the new deputy director of the National Economic Council.
During an online news briefing late last week, Kamin said Biden would order the ministry to extend the relief initially provided under the CARES Act, then extended twice under the Trump administration.
Kamin has not said how long the relief will last, but it is likely to extend beyond a few months, as the economy, still reeling from the coronavirus, stabilizes.
Kamin also said Biden supports the immediate cancellation of $ 10,000 in federal student loan debt per borrower in response to the COVID crisis, which will require congressional action, as well as the expansion of the loan forgiveness program for borrowers. federal students in public service jobs and income-based reimbursement programs.
“We can and must act quickly,” Kamin said, referring to a list of economic relief initiatives that the incoming administration is planning, including payments of $ 2,000 per person, a minimum wage increase to $ 15 from time and acceleration in the distribution of loans to small businesses. .
Biden proposed changes to the Department of Education’s income-driven federal student loan repayment plans that would reduce the monthly payment from 10% to 5% of a borrower’s discretionary income if their income exceeded $ 25,000 (that would be zero for those who earned less) for 20 years. After that, the loan would be canceled tax free.