More than 100 members of Congress are urging President Joe Biden to extend the student loan payment pause beyond August 31, 2022.
Here’s what you need to know — and what it means for your student loans.
U.S. Senators Bob Menendez (D-NJ), Cory Booker (D-NJ), Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) led a bicameral group of lawmakers to lobby Biden to extend the student loan moratorium for the fifth time. The push to convince Biden comes as three important deadlines for student loans approach. In a letter to Biden, the lawmakers wrote:
- They are concerned that Biden may restart student loan payments for tens of millions of student loan borrowers on September 1, 2022;
- The student loan payment pause has “helped many borrowers to keep a roof over their heads, secure childcare, and purchase food, health care, and medicine during the course of a pandemic responsible for the deaths of more than 1 million people in the U.S.”;
- Uncertainty in the economy, an increase in Covid-19 hospitalizations, and elevated food and gas prices have placed additional financial pressure on student loan borrowers;
- Restarting student loan payments now will create confusion for student loan borrowers; and
- Student loan borrowers eagerly await more information on student loan cancellation, the limited waiver for student loan forgiveness and other major changes regarding student loans.
While the legislators want Biden to extend the student loan payment pause, they don’t mention how long the student loan payment pause should be extended. Earlier this month, 180 organizations urged Biden to extend the student loan payment pause until all borrowers get student loan cancellation.
What this means for your student loans
Biden has confirmed he will announce a decision on student loan forgiveness and the student loan payment pause before August 31. Importantly, there’s no guarantee that Biden will extend the student loan payment pause. Previously, Biden extended the student loan moratorium four times, and President Donald Trump extended it twice following Congress’ passage of the Cares Act in March 2020. The U.S. Department of Education has instructed student loan servicers not to send student loan bills to borrowers, increasing speculation that Biden could extend the student loan payment pause beyond August 31. Biden is under immense political pressure from Democrats and Republicans regarding the student loan payment pause. Most Democrats want it extended, while most Republicans want the student loan payment pause to end. If the president doesn’t act, the student loan moratorium will automatically expire on August 31, and federal student loan payments will restart on September 1, 2022. Start planning now for that potential scenario. Learn all your options for student loan repayment. Here are some popular ways to save money on your student loans:
- Student loan refinancing (lower interest rate + lower payment)
- Income-driven repayment (lower payment)
- Student loan forgiveness (federal student loans)