Will the student loan payment pause be extended again? Here's what we know
(NEXSTAR) – Federal student loan borrowers haven’t been required to make a payment on their loans since March 2020. With less than a month before the payment pause is set to end, will borrowers see another extension from the Biden administration?
While it is clear President Biden is nearing some sort of decision on student loans, it’s not clear what that decision will entail. Last week, White House press secretary Karine Jean-Pierre said Biden will make a decision on student loan payments but that she would “let him speak.” Biden has said that decision will come before the end of August, which is when the current payment moratorium is set to end.
There have been calls by lawmakers and advocates for the Biden administration to extend the payment pause, which also puts collection on defaulted loans on hold and freezes interest rates at 0%.
Over 130 organizations recently sent a letter to Biden urging him to extend the payment pause until after proposed adjustments to income driver repayment plans have been processed. Late last week, a group of Democrats called on the Biden administration to extend the pause because restarting payments could hurt Americans already facing rising costs.
This comes as student loan servicers have reportedly been told to hold off on sending billing statements before the last day of the payment pause, which has prompted speculation that Biden could extend the pause again.
Others have pointed to November midterms as a reason for the Biden administration to not only push off the payment pause deadline but to forgive student loan debt. The Biden administration has floated the idea of canceling $10,000 per borrower, with the possibility that there could be restrictions based on income or degree type.
A Department of Education spokesperson told The Hill late last month that they “will continue to assess the impacts of the COVID-19 pandemic and the economy on student loan borrowers.”
“We will communicate directly with borrowers about the end of the payment pause when a decision is made,” the spokesperson added.
As it currently stands, federal student loan borrowers should plan to start repayments in September.
According to the Education Department, once the pause ends and at least 21 days before a payment is due, your loan servicer will send you a statement or notice. This will include how much you owe and when exactly it’s due. Your loan servicer may already have an estimated payment amount and the due date for you. More details on how to prepare for the payment pause coming to an end can be found here.
In the meantime, you may want to check your eligibility for student loan forgiveness. Roughly 1.3 million borrowers have seen $26 billion in student debt forgiveness since President Biden took office.
That includes thousands of borrowers who have received debt cancellation under the revamped PSLF program and another 690,000 borrowers who have had a total of $7.9 billion in student loans erased through discharges due to borrower defense and school closures. Over 400,000 borrowers have received more than $8.5 billion in debt forgiveness through total and permanent disability discharge.
The Biden administration agreed to cancel $6 billion in federal student debt for roughly 200,000 borrowers as part of a proposed class-action settlement. The borrowers claim their college defrauded them and their applications for relief from the Department of Education were delayed for years.