On July 31, a set of pandemic-relief measures for renters and homeowners enacted under President Trump will end – and the Biden administration doesn’t appear interested in renewing them.
A federal eviction ban is ending on July 31 after an extension last month. It’s the same for a moratorium on foreclosures. But the Biden administration rolled out a new measure allowing homeowners to refinance their mortgages and cut monthly payments in an effort to aid 1.8 million Americans still in forbearance.
Still, some groups are pushing for the White House to take more aggressive steps to prevent people from losing their homes.
On evictions, advocates say the emergency measure’s end threatens 6 million renters who are at risk of losing their homes at a moment new infections are rising and a federal program to help them has been very slow to provide rent relief.
“The CDC eviction moratorium is a necessary public health measure to lessen spread of/deaths from COVID-19,” Diane Yentel, president of the National Low-Income Housing Coalition, recently wrote on Twitter. “The need clearly remains as Delta surges & 6m renter households remain behind on rent & at risk of eviction when moratorium expires.”
Paul Williams, a fellow at the Jain Family Institute, projected that 80% of all households struggling with rental debt are in counties experiencing a surge of virus cases due to the Delta variant.
“Letting county courts kick people onto the street next week is probably the worst Delta variant strategy I can think of,” he wrote on Twitter.
Separately, the Biden administration is allowing homeowners to extend the length of their mortgage. The White House said Friday that homeowners with mortgages backed by Fannie Mae and Freddie Mac can still delay their payments until September 30.
The relief, however, is coming to an end soon: Borrowers must restart making payments after September 30.
Insider spoke with three people about how the end of COVID-19 student-loan forbearance will affect their lives and finances.
Camryn Hicks, 25, has $14,250 in student-loan debt and lives in rural Maine
I graduated from Boston College in 2018 with a degree in business and marketing. I’m part of the first generation of women in my family to go to college, and had some financial assistance in the form of loans and grants.
But I didn’t know what my student-loan payments would look like later when I was signing up for them.
When I graduated, I got a job working on a re-election campaign for Elizabeth Warren. I was able to start paying my loans off right away, and have never missed a payment. Warren dissolved her presidential campaign right around the time COVID-19 started to spread, so I ended up moving back in with my parents and starting a new job remotely.
During the forbearance, I’ve been able to make large lump-sum, principal-only payments on my student loans using my stimulus checks. Because of the forbearance, I’ve been able to start playing catch-up with my finances. When my car was stolen, I was able to replace it, and I also opened a retirement account.
For me, the forbearance period was a taste of what cancellation would feel like. The conversation around student loans, I think, focuses too much on the individual, and if that one person is going to be able to pay the debt they signed up for. But it’s an economic problem, not a personal one.
My parents took out hundreds of thousands of dollars in Parent PLUS loans to send both my sister and myself to school. Student-loan debt isn’t a personal burden, it’s a family burden.
In many ways, student loans perpetuate wealth inequality – where the people who don’t have to take them out get a head start. I think we need to stop splitting hairs over who’s worthy of relief.
Glenda Johnson, 32, has $36,693 in student-loan debt and lives in Charlotte, North Carolina
When I graduated from college in 2011, my student-loan balance was over $50,000, and I’m still paying back most of it.
I’m fortunate because throughout the pandemic, I’ve had a job. I make about $49,000 a year working in the sales department of a big tech company and also freelance on the side.
Most of my loans were in an income-based repayment plan before the forbearance. The forbearance has been able to keep me afloat, because for over a year I haven’t had to worry about being able to make my payments or not.
A few of my loans didn’t qualify for forbearance, so I’ve still been making payments on those.
With the forbearance ending, student-loan forgiveness is my best bet. The job market I graduated into isn’t what they told us it would be when I was in school, and it’s a lot of money to repay when I’m not seeing a rise in income.
Having to make payments again will weigh heavy on me, but I’m staying positive that there will be a solution somewhere – whether it’s me getting a promotion, or getting more money from my side gig.
I remain hopeful because the conversation around student loans is changing, but for whatever reason, we can’t push the needle, and people like me with student loans will have to keep waiting for change.
Dylan Cawley, 32, has $185,682 in student-loan debt and lives in northeastern Pennsylvania
I graduated with a master’s in public health from the University of Pittsburgh in 2013. For my undergraduate degree, I went to a state school, but for my master’s program I had to take out extra loans to pay for my rent and living expenses, which totaled in over $50,000 a year.
With the exception of the six-month grace period after graduation, I’ve been making monthly payments on my loans for over eight years. My federal loans are on income-driven payment, and I’ve been making regular payments on my private loans.
The forbearance has given me room to breathe. I’ve always wanted an emergency fund, and thanks to the CARES Act I’ve been able to start one. Once it ends, I’ll have to readjust my budget to include an additional $260 payment.
I think a lot of people who don’t have student loans don’t realize just how stressful it is. We aren’t complaining for no reason.
I’m not holding my breath for student-debt forgiveness. You can’t just forgive all existing student loans. If we forgive all student loans now, we’re going to be in the same situation 15 years from now. We have to start looking at student loans as a whole problem within itself.
The coronavirus recession hit small businesses hard. However, with the help of small business lending programs and government funding, many businesses managed to continue making their payments, with credit in good standing.
A report released on Tuesday from the Urban Institute, a left-leaning think-tank, found that despite significant revenue losses for small businesses in the past year, government support, reduced payrolls, and lender forbearance have helped those businesses continue paying their bills. Using data from businesses in Chicago, Detroit, Houston, New Orleans, New York, San Francisco, Seattle, and Washington, DC, the report found that while debts owed by small businesses have increased slightly since 2020, most have been able to keep up to date on payments.
“Our new evidence shows that the pandemic’s effects have largely not – or at least not yet – translated into dramatically higher delinquencies or defaults among small businesses,” the report said.
Nationwide, past-due payments or debts owed by small businesses have increased from 17.7% in February 2020 to 18.3% in January 2021, and the report said that while some businesses in the eight cities were more affected than others, differences “in business delinquency from city to city outweigh any effects observed since the pandemic.”
How businesses have paid their bills
Womply data found that revenues for small businesses are down 38% from pre-pandemic levels, while JPMorgan Chase reported that revenues are only down 9% from pre-pandemic levels.
Brett Theodos, a senior fellow at the Urban Institute and researcher on the report, said that given the disparate numbers on the revenue data, there isn’t a definitive answer yet on how much revenues are really down, but “there is a revenue hit regardless of what that number is.”
Despite the losses, those businesses have continued to stay afloat with the help of government-provided aid.
The Urban Institute report found that the Paycheck Protection Program – which lawmakers are now pushing to extend past March 31 – has factored into small businesses maintaining a strong credit standing due to the aid provided since the start of the pandemic.
And in President Joe Biden’s $1.9 trillion stimulus plan signed into law on Thursday, $50 billion was set aside for small business aid, including $7.25 billion specifically for the PPP.
In addition, the report said that many businesses have shrunk their costs during the pandemic by cutting payrolls, and they have also benefitted from flexibility granted from creditors and landlords.
“The combined result of these three forces-PPP support, cost reductions, and forbearances-has been a significant growth of cash holding for small businesses, rising by more than 41 percent before tapering modestly after its peak in August 2020,” the report said. “On average, small businesses have also been able to maintain strong credit standing because of these same forces.”
Continued support through policy is needed
While cutting payrolls and making other accommodations have helped small businesses survive in the past year, the report said that doing so is painful for the businesses and will constrain their future growths.
“Small businesses’ abilities to maintain payments on average does not imply that all businesses and owners are doing well,” the report said.
$300 weekly unemployment benefits were extended through September under Biden’s stimulus, and the benefits, along with the additional PPP funds, will help people and businesses get by financially.
Theodos noted issues with the first round of the PPP, during which the businesses who truly needed the aid were not appropriately targeted, and he suggested that when looking toward future aid for small businesses, policies should ensure aid is being equitably distributed.
“Let’s find those businesses that really need to help,” Theodos said. “Let’s support entrepreneurial ecosystems where they’re not well developed, let’s help de-risk loans that really are high risk, let’s overcome the race equity gap that exists and business ownership in this country, and let’s be more intentional around our targeting.”