October 4, 2022

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Biden’s Education Department sends sign the pause on student loan payments will be extended

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At the end of August, the current pause on student loan payments is expected to end…or is it ending?

The Education Department reportedly told loan servicers to stop sending messages about resuming student loan payments, indicating another extension on the pause.

According to The Wall Street Journal, the department requested companies that handle federal-level student loans stop sending letters on student loan payments, which as of now will resume after August 31.

Scott Buchanan, Student Loan Servicing Alliance’s executive director told WSJ, “we’re almost 30 days away from the planned resumption and the department has been telling servicers to hold off on resumption communications for the last few months.”

“Maybe the department expects that the White House will yet again kick the can down the road,” Buchanan added.

The executive director also told NBC News that the approaching deadline at the end of August without any guidance and a lack of planning would create an “untenable position” for both borrowers and servicers and borrowers.

Another extension is reportedly expected. Though not official yet. This is all the while millions of borrowers await Biden’s answer on a campaign promise to eliminate student loan debt. While some progressive lawmakers have advocated for up to $50,000 per borrower to be eliminated, Biden made a promise to eliminate $10,000 on the federal level of student loans.

Like another extension on pausing student loan payments without accruing interest, student loan debt forgiveness is up in the air.

Read more via Insider.

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