NPR’s Ailsa Chang speaks to Secretary of Training Miguel Cardona concerning the extension on the scholar mortgage pause. Additionally, roughly 7 million debtors who’re in default proper now will get a recent begin.
AILSA CHANG, HOST:
President Biden introduced right now that he’s extending the two-year freeze on federal scholar mortgage funds, curiosity and collections till August 31. The Training Division additionally mentioned it will supply a, quote, “recent begin” for the roughly 7 million debtors who’re in default proper now.
To speak extra about that, we’re joined now by the U.S. Secretary of Training, Miguel Cardona. Welcome.
MIGUEL CARDONA: Hello. Thanks for having me.
CHANG: Properly, thanks for being with us once more. All proper. I simply need to begin with this recent begin for debtors who’re at present in default. What does that imply precisely, recent begin?
CARDONA: Yeah. We all know so lots of our debtors have fallen on laborious instances, even earlier than the pandemic. They’ve perhaps had delinquency in funds, or they’ve needed to default on their loans. And what we need to do is be certain that they’ve a recent begin. We need to be sure that their loans are put in good standing once more, stage the enjoying subject. , let’s begin recent. How can we help you? How can we enable you achieve success together with your mortgage reimbursement? So that they’re beginning with a recent begin.
CHANG: OK. However they are not getting any of their loans forgiven – proper? – simply to be clear.
CARDONA: No. The recent begin program is actually simply placing them again in good standing regardless of no matter challenges they’d prior.
CHANG: OK. And are you assured that you would be able to get all of that executed and processed in simply 4 and a half months?
CARDONA: , restarting 41 million loans…
CARDONA: …Is one thing that is by no means been executed. However you already know what? Two years in the past, we might by no means have thought we will reopen colleges after shutting them down after a pandemic. We are able to do it. We put in numerous methods in place. We actually need to make it extra student-centered and extra borrower-centered right here.
So we work actually laborious at FSA. Now we have Richard Cordray over there, James Kvaal within the increased ed house – simply attempting to alter the programs to make it extra user-friendly and be extra supportive of our debtors who’re actually – you already know, they’d numerous challenges throughout the pandemic. And we predict this pause will assist 41 million Individuals breathe a bit of bit simpler.
CHANG: OK. Properly, that mentioned, you already know, with this new extension to August 31, we’re now speaking about 2 1/2 years whole the place no curiosity has accrued on scholar loans, federal scholar loans, which you’d suppose is strictly when debtors would need to be paying off their loans. However I perceive that your information reveals solely about half one million debtors have been doing that. Do you are worried that the blended messages this administration is sending about attainable debt cancellation additional down the highway is perhaps inflicting individuals to not pay down their loans?
CARDONA: No. I actually suppose it is – you already know, Individuals had a troublesome time throughout the pandemic. , what we’re discovering is persons are beginning to, you already know, pay their mortgages, or little one care bills are coming again as a result of many people are returning again to work. So what we’re listening to and what we’re seeing is that, you already know, this pandemic – issues are getting higher, proper? The economic system is getting higher – 7.9 million jobs over the past 12 months, biggest 12 months of job development on report. However Individuals are nonetheless struggling proper now. And we do consider that this pause will assist them. And with regard to, you already know, the messaging round broader mortgage forgiveness, whereas we proceed these conversations, I do suppose this pause is one thing that Individuals wanted throughout this pandemic.
CHANG: Let me ask you about mortgage forgiveness and on this difficulty of struggling Individuals. I imply, some Democratic lawmakers have been lukewarm about this explicit extension as a result of they have been searching for higher mortgage forgiveness. Is there an opportunity that mortgage forgiveness will probably be a chance after August 31?
CARDONA: Proper. I am probably not connecting these two issues, you already know, when it comes to what we’re attempting to do for our debtors. Whereas the conversations round mortgage forgiveness proceed to occur, we did really feel that this pause was wanted additionally. And we positively need to be certain that we’re not simply additionally limiting it to the general broad mortgage forgiveness. There’s a lot that has been executed since President Biden took workplace to make it a bit of bit simpler for debtors, you already know? So we’ll proceed to place our college students first, present mortgage forgiveness the place we will and preserve our Individuals supported all through this course of.
CHANG: All proper. That’s the U.S. Secretary of Training, Miguel Cardona. Thanks very a lot for becoming a member of us once more.
NPR transcripts are created on a rush deadline by an NPR contractor. This textual content is probably not in its ultimate kind and could also be up to date or revised sooner or later. Accuracy and availability could fluctuate. The authoritative report of NPR’s programming is the audio report.