(NEXSTAR) – Federal student loan borrowers have not been required to make a payment on their loans since March 2020. With less than a month to go until the payment pause ends, will borrowers see another extension of the Biden administration?
While it’s clear that President Biden is approaching some sort of decision on student loans, it’s unclear what that decision will entail. Last week, White House press secretary Karine Jean-Pierre said Biden would make a decision on student loan repayments, but that she would “let him speak”. Biden said the move would come before the end of August, when the current payment moratorium is expected to end.
Lawmakers and advocates have called on the Biden administration to extend the payment pause, which also suspends collection of delinquent loans and freezes interest rates at 0%.
More than 130 organizations recently sent a letter to Biden urging him to extend payment break until after proposed adjustments to revenue driver repayment plans have been processed. At the end of last week, a group of Democrats called the Biden administration to extend the pause because restarting payments could hurt Americans already facing rising costs.
This comes as student loan servicers have one would have said to wait over sending billing statements before the last day of the payment pause, which sparked speculation that Biden could once again extend the pause.
Others pointed to November’s midterm as a reason for the Biden administration not only to push back the deadline for suspending payments, but also to write off student loan debt. The Biden administration floated the idea of canceling $10,000 per borrowerwith the possibility that there is may be restrictions based on income or type of degree.
A spokesperson for the Ministry of Education says The Hill late last month that they “will continue to assess the impacts of the COVID-19 pandemic and the economy on student borrowers.”
“We will communicate directly with borrowers on the end of the payment pause when a decision is made,” the spokesperson added.
As it stands, federal student loan borrowers should plan to begin repayments in September.
According to Department of Education, when the pause is over 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 is due. Your loan manager may already have an estimated payment amount and due date for you. More details on how to prepare for the end of the payment break can be found here.
In the meantime, you may want to check your eligibility for student loan forgiveness. About 1.3 million borrowers have seen $26 billion in student debt forgiveness since President Biden took office.
This includes thousands of borrowers who have benefited from debt cancellation under the revamped PSLF program and 690,000 other borrowers who saw a total of $7.9 billion in student loans wiped out through releases due to borrower defense and school closures. More than 400,000 borrowers have received more than $8.5 billion in debt forgiveness through total and permanent disability release.
The Biden Administration agreed to cancel $6 billion in federal student debt for approximately 200,000 borrowers as part of a proposed class action settlement. Borrowers say their college defrauded them and their requests for relief from the Department of Education have been delayed for years.