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Finance professionals encourage urgency for new student loan deadline

The Biden administration announced another extension for the federal student loan moratorium...
The Biden administration announced another extension for the federal student loan moratorium Wednesday.(25 News/Heart of Illinois ABC)
Published: Apr. 6, 2022 at 9:27 PM CDT
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(Heart of Illinois ABC) - Federal student loan payments have been paused for nearly two years. Now, the Biden administration is extending the pandemic moratorium again.

Originally scheduled for May 1, the deadline has been pushed back to August 31, per a Wednesday morning announcement. Professionals say this is a great benefit for borrowers. Now, it’s a question of making sure they’re aware of both their options and deadlines.

“I think it benefits everybody that had those loan payments, either already or upcoming,” says Craig Maynard, the CFO and President for Finance and Facilities at Eureka College.

The extension continues the pandemic trend for federal student loan borrowers. This is great news, according to the Illinois Student Assistance Commission, responsible for state education grants.

“The federal pause comes at a great time for many families and many students, as well,” says Meghan Chrum, the Professional Development Specialist for ISAC.

Most importantly, financial aid professionals want the message to spread.

“I don’t know that it was very widely known,” adds Maynard, “so I think that extending that, it does a lot of good things for anyone that has loans.”

That’s especially true for those in default. For them, their accounts will get reset entirely, a change that will affect an estimated seven million people.

“The Department of Ed hasn’t shared guidance on if that will be an automatic process or how that’s going to look for them,” Chrum says. “So really I think the next couple of weeks are going to be interesting, I think, to see how they navigate that.”

Sen. Dick Durbin says he’s in full support of the decision.

“I hope it goes even further, I hope there is some forgiveness of student loans for those that are deeply in debt,” says the senator in an Wednesday interview.

Understanding the effects loans can have, Durbin — a Democrat —adds he’s working with Texas Republican senator John Cornyn on a bill to provide more loan forgiveness options.

“We’ve had a lot of talk about student loans, it’s time to put a measure on the floor and pass it,” Durbin says.

The repayment moratorium extension doesn’t impact the schools. Maynard says since it only involves federal student loans, it’s limited to the government’s piggy bank. Loans from private banking institutions are still in repayment.

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