Education ministry suspends collection of over 1 million delinquent student loans
The Ministry of Education this Tuesday extended relief, including a pause on the accumulation and collection of interest on student loans, to more than 1.14 million borrowers in default.
Why is this important: Loans in default under the federal Family Education Loans program, which are guaranteed by the U.S. government but held by private entities, were not eligible for COVID-related relief.
- This relief, first implemented by the Trump administration last year and then extended by the Biden administration, has helped tens of millions of borrowers manage the financial pressure caused by the coronavirus pandemic.
- The Education Department said Tuesday’s decision “would protect more than 800,000 borrowers who risked having their federal tax refund seized to pay off a delinquent loan.”
What they say : “At a time when many student loan borrowers face economic uncertainty, we are ensuring that the relief already provided to borrowers of loans held by the Ministry is available to more borrowers who need it. the same help so that they can focus on meeting their basic needs, ”Education Secretary Miguel Cardona said.
- “Our goal is to enable those borrowers battling default to obtain the same protections previously offered to tens of millions of other borrowers to help overcome the uncertainty of the pandemic.”