Student loan payment break set to end this month
The student loan payment break is expected to end this month.
Here’s what you need to know — and what it means for your student loans.
After more than two years of historic student loan relief, the student loan payment pause ends August 31, 2022 for more than 40 million student borrowers. As President Joe Biden plans to enact large-scale student loan forgiveness, student borrowers are wondering what the future holds for student loan repayment. So far, the White House has not indicated that the suspension of student loan payments will continue. With only weeks to go until expiration and no official communication to the contrary, student borrowers should prepare now for the restart of student loan repayments.
The student loan payment break
In response to the Covid-19 pandemic, Congress passed historic student loan relief through the Cares Act, a $2 trillion stimulus package. As of March 2020, student borrowers receive the following benefits for their federal student loans:
President Donald Trump extended this student loan relief twice, and Biden extended the student loan payment break four more times. Through this student loan relief, student borrowers have collectively saved $5 billion per month.
Will Biden extend student loan payment break?
Student borrowers are awaiting more information on student loan forgiveness, the limited student loan forgiveness waiver, and other major student loan changes. US Education Secretary Miguel Cardona has said Biden may extend the student loan payment suspension beyond August 31. However, the Ministry of Education has not announced its intention to pursue this student loan forbearance. Any indication that the student loan moratorium could continue? Student loan officers say the Department of Education recently instructed them not to issue student loan invoices to student borrowers. This has fueled speculation that Biden could extend the student loan payment break for the fifth time. More than 100 lawmakers have urged Biden to extend the student loan payment break. They are concerned about the ongoing Covid-19 pandemic and the uncertain economic environment. Sen. Elizabeth Warren (D-MA) warned Biden that restarting student loan repayments will cause more student borrowers to default on their student loans. Lawmakers also want Biden to make more changes to student loans and student loan repayment, especially after Biden delayed his new student loan plan.
Republicans warn suspension of student loan payments will increase inflation
Congressional Republicans say student loan repayments should resume immediately. They are concerned about rising costs to the federal government for both student loan forgiveness and the student loan payment pause. Republicans fear that canceling student loans and extending the student loan moratorium will increase inflation, which is at its highest level in 40 years. The White House says these policies would have minimal impact on inflation. However, Biden’s decisions on student loans come amid a shocking government report that shows the federal government will lose nearly $200 billion in federal student loans issued over the past 25 years. Republicans also say Biden canceled $400 billion in student loans and another extension of the student loan payment pause is unfair to the majority of Americans who don’t have student loan debt. The Biden administration has not indicated that an extension of the student loan payment pause is coming. With just weeks to go until the student loan moratorium ends, student borrowers should understand all of their student loan repayment options. Know these popular ways to save money on your student loans to get out of debt faster: