Loan payment

Student loan payment freeze to end in August as Biden reflects on his decision

Millions of student borrowers remain in limbo as they await a decision from President Biden on whether he intends to extend a payment pause on federal student loans set to expire at the end of August.

The Department of Education suspended federal student loan payments in March 2020 at the start of the coronavirus pandemic and set the interest rate at 0% during the break.

People march as student borrowers take part in a protest outside the White House staff entrance on July 27, 2022, demanding President Biden forgive student loan debt in August. (Jemal Countess/Getty Images for We The 45 Million/Getty Images)

The Department of Education has provided about $72 billion in student loan interest relief alone. About 41 million Americans are benefiting from the federal government’s suspension of student loan payments, which has been extended six times – twice by former President Trump and four times by Biden.

But the moratorium is set to officially end on August 31, meaning millions of borrowers will have to start repaying their loans. With just over two weeks until payments resume, Biden did not indicate whether he plans to further delay the payment freeze.

FED LIKELY TO CONTINUE RAPID INTEREST RATE HIKES DESPITE RELIEF IN INFLATION

Student Loan Forgiveness

Activists hold signs during a student loan forgiveness rally at Pennsylvania Avenue and 17th Street near the White House on April 27, 2022, Washington, DC (Anna Moneymaker/Getty Images/Getty Images)

The White House suggested on Tuesday that a seventh extension to the payment freeze is still under consideration. Administration officials have promised a response by the end of the month.

“Although I don’t have an announcement here today, I will tell you that we are having daily conversations with the White House, and borrowers will hear directly from us soon when a decision is made,” the secretary said. to Education, Miguel Cardona, during an interview on “CBS Mornings”.

CLICK HERE TO LEARN MORE ABOUT FOX BUSINESS

The decision comes as Biden faces growing pressure from progressive lawmakers not just to delay restarting payments, but to completely erase student loan debt from millions of Americans.

Biden has campaigned to forgive billions of dollars in student loan debt but has so far written off only a fraction of the amount pledged for about 72,000 borrowers, angering some progressives.

President Biden

President Biden speaks at Max S. Hayes High School in Cleveland, July 6, 2022, about the economy and the final rule implementing the special U.S. bailout financial assistance program protecting pension plans multi-employer. (Saul Loeb/AFP via Getty Images) / Getty Images)

Outstanding student debt has doubled over the past decade, approaching a staggering $1.7 trillion. About one in six American adults owe money under a federal student loan, which is the largest amount of non-mortgage debt in the United States. It has been cited as a major impediment to people’s “economic life” by Federal Reserve Chairman Jerome Powell.

GET FOX BUSINESS ON THE ROAD BY CLICKING HERE

Critics have argued that canceling student loan debt exceeds the president’s authority granted by Congress. Debt cancellation would also add to the country’s already burgeoning national deficit, which hit a record $30 trillion last year.