Student loan payments will restart in 15 days but Biden remains silent – Forbes | Vette Leader

Student loan payments begin in 15 days, but President Joe Biden is silent.

Here’s what you need to know – and what it means for your student loans.

student loans

The student loan payment pause ends on August 31, 2022, which means student loan borrowers must prepare for the September 1 resumption of federal student loan payments. Student loan borrowers hoping for a seventh extension of the student loan payment moratorium may be out of luck as the President gave no indication of a continued deferral on student loans.


Student loan payment pause: when payments resume

When student loan payments resume on September 1, you should be prepared for what happens next. Federal student loan payments have been suspended since March 2020, when Congress passed the Cares Act, the $2 trillion stimulus package. This landmark legislation included historic student loan easements, including:

President Donald Trump extended the student loan payment pause twice and Biden extended the student loan payment pause four more times. Beginning September 1st, monthly student loan payments will be due for more than 40 million student borrowers. Instead of 0% student loan rates, student loan rates on federal student loans will revert to the same rate as before the Covid-19 pandemic. What about the recent rate hikes? Because federal student loans have fixed interest rates, student loan borrowers will not be affected by the Federal Reserve’s recent rate hikes.


Will Biden Extend Student Loan Payment Pause?

Student loan borrowers are wondering if Biden will extend the student loan payment pause. Throughout Biden’s presidency, borrowers have not had to pay a single dollar in government student loans. Progressive Democrats like Sen. Elizabeth Warren (D-MA) and other major civic organizations have called on Biden to again extend the pause on student loan payments until at least the end of the Covid-19 pandemic. Why? They say student loan borrowers are unprepared to resume student loan payments, the Covid-19 pandemic is ongoing and borrowers are facing heightened economic uncertainty. Warren worries that if student loan payments resume now, millions of student loan borrowers could default.

The White House and Biden have each confirmed that Biden will announce a decision on large-scale student loan forgiveness before August 31, 2022. That’s the same day that the student loan payment pause expires. However, the Biden administration has remained silent on the prospect of another extension of the student loan payment pause. There are several indications that Biden could extend student loan easing. For example, US Secretary of Education Miguel Cardona said the Department of Education is ready if Biden extends student loan easements. The Department of Education also ordered student loan service providers not to send student loan bills to borrowers, fueling further speculation that student loan payments would not resume as planned.


Student loans: next steps

While there is speculation that Biden could extend student loan easing, there is little hard evidence to support this claim. Republicans want Biden to end the student loan pause immediately, citing the $5 billion monthly cost to the federal government. They also rolled out a new blockbuster student loan forgiveness plan that could reshape the future of student loans. With just a few days left until the end of the student loan pause, Biden could announce a decision any day. Historically, Biden has announced an extension of the student loan payment pause with at least three weeks’ notice. That deadline has passed, however, leaving student loan borrowers wondering if extending it further is just wishful thinking. Perhaps Biden could announce his decision on large-scale student loan forgiveness and the joint student loan payment pause. However, student loan borrowers should prepare for the resumption of federal student loan payments. Here are some of the best ways to pay off student loans and save money:


Student Loans: Related Reading

Student Loan Forgiveness: 5 Key Takeaways from the New Student Loan Forgiveness Plan

Cancellation of student loans: Congress proposes 0% interest on student loans

Senators propose major changes to student loan forgiveness

Student loan forgiveness must be extended, attorney generals warn Biden

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