Several key federal student loan forgiveness and relief initiatives are about to end. At the same time, the Biden administration is approaching a self-imposed deadline for deciding whether to enact broad student loan forgiveness. President Biden will have to make a decision on these initiatives very soon — likely within a matter of weeks.
Here’s where things stand.
Student Loan Pause Ends in August
The ongoing student loan pause is set to end in just 37 days. The pause, which has suspended payments and interest accrual on government-held federal student loans for over two years, was originally supposed to last six months. But as the country grappled with the long-term impacts of the Covid-19 pandemic and the associated economic turmoil, President Trump and President Biden extended the payment pause multiple times. Biden’s last extension is set to end on August 31.
Unlike previous times the student loan pause was set to expire, the Education Department appears to making little effort to notify borrowers of the imminent return to repayment. That, combined with ongoing economic pressure associated with the worst inflation American families have experienced in decades, suggests that a further extension of the payment pause is possible, if not likely. But top Biden officials have not tipped their hands. Ultimately, borrowers will need to be informed within weeks, if not days, about the fate of the student loan pause.
Student Loan Forgiveness Decision By August
President Biden and top Education Department officials had expressed openness to some form of mass student loan forgiveness in recent months. Biden campaigned on a pledge to support $10,000 or more in federal student loan forgiveness for most borrowers, but he subsequently expressed reluctance about cancelling larger amounts of student debt or relying on executive action (rather than Congressional legislation) to implement it.
In April, Biden seemed closer than ever to making a decision on broad student loan forgiveness, suggesting that he would decide within weeks. Reports suggested that top officials were considering $10,000 in federal student loan forgiveness via executive action, with restrictions based on borrowers’ income levels.
But months have since passed, and the White House has not said much publicly other than Biden is still considering what to do. Officials previously suggested that Biden would decide on student loan forgiveness before the end of the student loan pause. Biden himself appeared to confirm that last week, telling reporters that he would decide on broad student loan cancellation “by the end of August.”
PSLF Waiver Ends in October
The Biden administration implemented the “Limited PSLF Waiver” initiative last year to broaden access to the troubled Public Service Loan Forgiveness program, which can wipe out the federal student loan debt for borrowers who work in nonprofit or government jobs for 10 years or longer. The initiative has resulted in over $8 billion in approve student loan forgiveness, according to the Education Department.
But the initiative is set to end on October 31. At that point, the PSLF program would revert to the original program rules, which had tripped up borrowers and student loan servicers for years, keeping approval rates hovering in the one or two percent range. Advocacy groups have been urging the Biden administration to extend the waiver. But so far, the administration is still pushing the October 31 deadline.
“Now through October 31, 2022, you may be able to receive credit for student loan payments that previously did not qualify for PSLF,” said the Education Department in a tweet on Monday. “Learn more & submit your waiver.” The notice echoes similar messaging by top Biden officials in recent weeks.
Biden has not indicated whether an extension of the Limited PSLF Waiver is under consideration, but he would need to act soon to extend it, given the approaching October deadline.