December 7, 2022

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Government extends suspension on federal student loans until January 31, 2022 Univision Money News

Government This Friday is the suspension of federal student loan payments until January 31, 2022. This is the last extension given in the midst of the Govt-19 epidemic plot, the Department of Education said.

Restriction on payments and collection of interest on this type of loan It expires on September 30th. However, the increase in corona virus cases due to the delta diversity and the difficult financial situation affecting millions more people in the country has caused the Joe Biden administration to change its plans.

“The suspension of payments has allowed millions of people in the United States to focus on their families, health and finances instead of student loans during this national emergency,” Secretary Miguel Cardona said in a statement.

“As our country continues to recover from this huge gap, this final extension will give students and borrowers time to plan a repayment plan,” he added.

The Department of Education also says it will notify and inform those who have these loans over the next few days so they can plan how to repay them when this offer period ends.

The call to forgive a portion of this debt has been renewed

In early April, The Biden administration said it was assessing whether the president had the legal authority to pardon up to $ 50,000 For those with federal student loans. Chief executive Ron Klein at the time said he hoped there would be an analysis “in a few weeks” as to whether this was possible.

The call for a waiver of a portion of the federal student debt has been joined by more Democrats in recent months. A bill promoted by Massachusetts Senators Elizabeth Warren and New York’s Chuck Schumer and Massachusetts Representative Ianna Presley is currently in Congress.

Precisely Warren, Presley and Schumer returned to the matter this Friday. “We are pleased that the Biden administration has heeded our call to extend the suspension of federal student loans, providing great relief to millions of borrowers facing a devastating financial crisis.” A statement.

But “this is not enough. Our student credit system is widening racial gaps and slowing down our entire economy. We continue to urge management to use its executive power to eliminate $ 50,000 in student debt.They added.

The most recent stimulus package, although it does not forgive student debt, then contains the relief that some have seen as a step you can take on a wider scale. Under the Grants Program, the student loan that is forgiven – under current amnesty plans – is tax-free until January 2026.

Until now, by law, everyone who forgives a student loan has to pay tax on the amount forgiven as income. This has in many cases raised their Internal Revenue Service (IRS) bills. Exceptions are loans made by public servants or teachers because they are not subject to tax.

The inclusion of these loans in student loans is considered a lesser obstacle by organizations arguing that these loans should be forgiven so that they can be removed in the future.