Biden Might Extend The Student Loan Payment Pause Again
The federal student loan debt moratorium is set to end on August 31st, but a move by the Biden administration makes some think another extension might be on the way.
If you're one of the millions of student debt holders stressing about the approaching August 31st deadline marking the end of the student loan payment pause, there’s reason to believe that the moratorium could be extended again. Though President Biden said that he would make a decision on student loans before the end of August, new signs point to another extension potentially being on the way.
What’s the sign? According to Forbes, the federal government has told loan servicers to not send out student loan bills to borrowers ahead of August 31, 2022, the scheduled freeze end date. This has some speculating that a major decision on student loan cancelation might get kicked down the road again.
"If student loan servicers don't send student loan bills to student loan borrowers, this could imply that student loan borrowers don't have to make federal student loan payments starting on September 1," Forbes notes.
The student loan payment freeze has been extended about half a dozen times since it was enacted in March 2020 as a financial relief effort in the early days of the COVID-19 pandemic. The last time the freeze was extended was April 2022. For the past two-plus years, borrowers have not been required to pay down their loans and interest has not accrued on those loans, either. This has allowed borrowers to keep dozens of billions of dollars of their own money in their pockets while weathering the worst of the economic crisis due to COVID-19 — though it’s not as though things are much easier now for working Americans.
Reports have suggested that whenever Biden does make a decision, he will likely choose to cancel up to $10,000 in student loans per borrower for people under a certain income threshold, though many advocates and experts argue that’s not nearly enough, and that more would have to be done to help those with student debt.
As of June 2022, student debt totals $1.75 trillion. 45 million Americans have an average of $28,950 in debt. Polls have shown that when it comes to federally-held student loans, most millennials favor significant debt cancelation.