Student loans: will the current pause on payments be extended?
Time is running out…student loan repayments are expected to restart in a month. Be ready and see where things stand.
TO SUM UP
- President Joe Biden plans to announce a student loan forgiveness program by the end of the month. This is when the current payment pause is over.
- One possibility: $10,000 relief for certain borrowers.
- Some supporters say it doesn’t go far enough and worry about the lack of detail so far.
- Student loan payments have been on hold since March 2020, as part of federal pandemic relief signed into law by former President Donald Trump and extended by Biden.
- There has been no indication of when or if payments will resume.
- It has been reported that Biden will give borrowers earning less than $150,000 about $10,000 in relief. But his administration has been mostly silent on the details.
WHAT IS HAPPENING
- Experts say the break will likely be extended for a seventh time.
- Why? These reasons include mid-term elections, rising inflation and poor communication from loan managers.
- Yet debt cancellation does not address the rising cost of higher education.
WHY IS IT IMPORTANT
- The millions of Americans burdened with student loans hold more than $1.7 trillion in debt. Most of it is federal.
- A 2022 study found that most Gen Z and Millennial borrowers put off a major financial decision — like buying a home — because of their student loan debt.
- 59% of graduates with debt said higher education improved their opportunities in the workplace. 10% said they regretted it.
LEARN MORE IN THE SUM
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