Advertisement
U.S. markets open in 1 hour 32 minutes
  • S&P Futures

    5,303.75
    -4.50 (-0.08%)
     
  • Dow Futures

    40,130.00
    -14.00 (-0.03%)
     
  • Nasdaq Futures

    18,481.75
    -22.00 (-0.12%)
     
  • Russell 2000 Futures

    2,139.30
    +0.90 (+0.04%)
     
  • Crude Oil

    82.41
    +1.06 (+1.30%)
     
  • Gold

    2,230.00
    +17.30 (+0.78%)
     
  • Silver

    24.67
    -0.09 (-0.35%)
     
  • EUR/USD

    1.0786
    -0.0043 (-0.40%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Vix

    13.03
    +0.25 (+1.96%)
     
  • GBP/USD

    1.2612
    -0.0026 (-0.20%)
     
  • USD/JPY

    151.3590
    +0.1130 (+0.07%)
     
  • Bitcoin USD

    70,696.91
    +463.70 (+0.66%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.37
    +20.39 (+0.26%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

U.S. pauses collections from 1.14M student loans default

Yahoo Finance’s Aarthi Swaminathan joined Yahoo Finance Live to break down what the U.S. pausing collections for 1.14M student loans in default means.

Video Transcript

ADAM SHAPIRO: Now there's a move that's been announced that's going to pause collections for about 1.1 million student loans that are in default. Aarthi, is this a permanent solution or just a temporary until they get to the next step?

AARTHI SWAMINATHAN: Yeah, so this is a really-- it seems like this is a short-term solution. It's at least up until the end of the pandemic. It's also one that is retroactive. What that means is that [INAUDIBLE] should have done this before. But the policy takes time, right? So basically, 1.14 million borrowers with federal family education loan, kind of quasi private sort of federal loans, these people had had their wages garnished, stimulus checks seized.

They've had their tax refund seized all through the pandemic. And the government basically stepped in and said we're going to do something about these borrowers. We're going to help them and not have all these things happen to them. That's basically what they announced today, but this is only one out of 5 million borrowers in this category. These are defaulted borrowers at 5-- sorry, four more million people that they could help, but no news on that.

SEANA SMITH: Yeah, Aarthi, I wanted to ask about that just because like you were saying, yes, this is a huge step in the right direction for over a million people. But there's 5 million commercial federal family education loan borrowers out there. So what does that mean? Have we heard at all just about plans to potentially expand the help on this and expand it to help all borrowers that fall under that category?

AARTHI SWAMINATHAN: So that's the question that we as reporters put to the Department of Education, who they had a press call in the afternoon. And the question was they were still exploring all options. That's always the line they give, right? But the reason why it's so complicated-- it's even more complicated, but other than that, the loans that were in default were basically owned by education.

But the rest of the millions that are still out there basically left out on the payment [INAUDIBLE], they are private owned. So it's kind of very difficult for the government to still grapple with ownership of this, ownership over that. So they're just trying to help with the loans that they have right now. Again, still exploring all options, but hopefully, this relief comes sooner before the pandemic ends and the moratorium basically is lifted.

Advertisement