Nearly 200 organizations are calling on President Joe Biden to extend the student loan payment pause and cancel student loans.
Here’s what you need to know — and what it means for your student loans.
A social organizations executive wrote to the president this week urging him to extend the student loan moratorium beyond August 31, 2022. According to the letter:
- Biden administration ‘rushes’ to restart student loan repayments;
- do not threaten the financial security of student borrowers to fight inflation;
- student loan cancellation must be implemented before the student loan payment is restarted; and
- student borrowers are not ready to restart student loan repayments
Congress suspended federal student loan payments in March 2020, and student loan borrowers have not been required to make a single federal student loan payment since then. Collectively, the federal student loan moratorium has granted student borrowers over $130 billion in student loan forgiveness. While Biden has extended the student loan payment break four times since becoming president, social groups and progressive members of Congress are urging Biden to extend the moratorium for the fifth time. Why? They argue that student borrowers are struggling financially as a result of the Covid-19 pandemic and that the Biden administration has not completely revamped student loan repayment. That said, Biden agreed to write off $6 billion for 200,000 student borrowers last week. (Here are 5 major changes to student loans).
Biden must cancel student loans before restarting student loan payment pause
The 180 organizations write that Biden must cancel student loans before student loan payments can resume. According to the letter:
Until Biden develops a clear path for student loan forgiveness, organizations argue that student loan repayments cannot restart.
Cancellation of the student loan and suspension of the payment of the student loan: next steps
Biden has three major student loan decisions to make in the coming weeks. Two of these decisions include the large-scale cancellation of student loans and the suspension of student loan payments. The student loan forgiveness framework might look like this. US Education Secretary Miguel Cardona has said Biden may extend the student loan payment break, although Biden has not commented publicly on whether he will. Biden is expected to announce his decision on both topics in the coming weeks. Opponents say extending the student loan payment pause and enacting large-scale student loan forgiveness will increase inflation. The student loan payment break ends August 31, 2022, which means federal student loan payments begin September 1. Be sure to evaluate all of your options to find the best student loan repayment strategy for your unique financial situation: