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January 20, 2021 at 02:18 PM
On the first day of his administration, President Joe Biden pledged “to take a historic number of actions to deliver immediate relief for families across America,” including two that could affect the clients of financial advisors: extending the moratorium on federal student loan payments through September and a review of the Labor Department’s regulation limiting the use of ESG-focused investments in defined contribution retirement plans.
A fact sheet listing Biden’s “Day One Executive Actions” says Biden will ask the Department of Education “to consider immediately extending the pause on interest and principal payments for direct federal loans until at least September 30, 2021.”
Biden’s pick for Education secretary is Miguel Cardona, the Connecticut education commissioner, who has yet to be confirmed.
There was no mention in the fact sheet of Biden’s plans to forgive student loan debt, which David Kamin, the incoming deputy director of the National Economic Council, disclosed less than two weeks ago but which will require congressional action. Kamin said Biden supports cancellation of $10,000 worth of student loan debt.
According to the Federal Reserve Bank of New York, student loan debt totaled $1.55 trillion in the third quarter, a $9 billion increase from the second quarter. Slightly more than 90% of that debt is in federal student loans.
