Biden Admin Warns of 'Historically High Increase' in Default on Student Loans
Biden Admin Warns of 'Historically High Increase' in Default on Student Loans
Biden Admin Warns of , 'Historically High Increase' in , Default on Student Loans.
The warning came via court papers filed earlier this week by U.S. Department of Education Undersecretary James Kvaal.
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The filing cites efforts to block the implementation of the Biden administration's student loan debt relief.
A federal judge in TX recently struck down the student loan forgiveness program, calling it "unconstitutional.".
Since then, the Biden administration has halted applications for the plan which forgives up to $20,000 in federal student loans.
Among the reasons for the historically high increase in loan defaults, .
Kvaal cites the COVID-19 pandemic.
Unless the [Education] Department is allowed to provide debt relief, .., James Kvaal, Education Department Undersecretary, via NBC News.
... we anticipate there could be an historically large increase in the amount of federal student loan delinquency and defaults as a result of the COVID-19 pandemic, James Kvaal, Education Department Undersecretary, via NBC News.
According to data, nearly 25% of student loan borrowers were in default or delinquent on their loans even before the pandemic.
Kvaal's filing anticipates that confusion over student loan forgiveness will likely lead to defaults.
These student loan borrowers had the reasonable expectation and belief that they would not have to make additional payments on their federal student loans, James Kvaal, Education Department Undersecretary, via NBC News.
This belief may well stop them from making payments even if the Department is prevented from effectuating debt relief, James Kvaal, Education Department Undersecretary, via NBC News.
Unless the Department is allowed to provide one-time student loan debt relief, .., James Kvaal, Education Department Undersecretary, via NBC News.
... we expect this group of borrowers to have higher loan default rates due to the ongoing confusion about what they owe, James Kvaal, Education Department Undersecretary, via NBC News