Student Loan Payment Pause: Will Joe Biden Extend It or Let Borrowers Start Paying Again?

President Joe Biden will announce the decision regarding the student loan payment pause this week, including whether there will be a student loan extension, according to U.S. Secretary of Education Miguel Cardona.

Forbes reported that the student loan payment pause will end on August 31. However, the Biden administration has not yet announced its actions following the deadline.

Cardona said they know many people are "waiting to hear something" about the August 31 deadline. The Education Secretary then noted that the public will hear about it within a week or so.

Biden has already extended the student loan moratorium four times, while former President Donald Trump extended it twice. Leaked documents from the Education Department reveal a proposal to cancel $10,000 of student loans for all federal student loan borrowers.

However, this will only be applicable for those borrowers who earn up to $150,000. More than 40 million student loan borrowers are waiting for the president's decision on whether to extend it or not.

Student Loan Payment Pause

Joe Biden said in April that he was eyeing a student loan reduction. However, it would take a few weeks, and no formal announcements were made, according to USA Today.

Cardona said the officials have been talking about the student loans matter "daily." Democratic lawmakers and student loan activists were pressuring the Biden administration to forgive as much as $50,000 in student loans.

According to TIME, there are signs that a student loan payment extension will be pushed, such as the upcoming midterm elections.

Higher education expert Mark Kantrowitz said restarting student loan payments two months before midterm elections would be "political suicide." He added that there was no other factor to justify further extension except political considerations.

Founder and CEO of student loan repayment app Tony Aguilar said that excessive inflation could also be a factor in extending student loan payments. The app Chipper CEO noted that the borrowers will likely be unable to pay off their loans.

Student Loan Payments

Some people with student loans received a notice last Thursday from their servicer, noting that the next payment would be automatically debited at the start of September. However, the Education Department addressed the matter as an "error," CBS News reported.

Student loan servicer Nelnet sent an email to those with student loans, saying that payment would start on September 1, adding to check the servicer's website for up to three days to make changes on the scheduled debit.

Nelnet sent a second email hours after the first notice was sent, noting that payments were paused due to the COVID-19 pandemic. It said to disregard the first email, and it should not have been sent out.

The student loan payments were extended in April, making the loan payment deadline on August 31.

This article is owned by Latin Post.

Written by: Mary Webber

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