Though the latest pause in student loan payments is currently slated to expire at the end of August, President Joe Biden’s administration has remained vague on when payments will once again resume.
The CARES Act, signed into law in March 2020, provided economic relief amid the surge of COVID-19 and subsequently paused student loan payments and interest rate accruals for six months until September of that year. Biden extended it further when he took office, and to date there have been a total of six pauses in payments.
Education Secretary Miguel Cardona stated during a recent interview on MSNBC that "At some point, people are going to have to start paying what they can afford to pay" on their student loans. However, he declined to comment on whether student loan payments would restart in September, saying department officials are conferring with the White House about when to restart payments. He said borrowers would get "a long on-ramp with clear information" before payments restart.
Borrowers of federal student loans could see their payments resume in September, and those with private student loans did not fall under the current federal payment forbearance. If you're looking for ways to lower your monthly loan payments, you could consider student loan refinancing. Visit Credible to find your personalized interest rate without affecting your credit score.
White House hints at another payment pause extension
Federal student loan payments have been on pause for more than 26 months, and interest rates have been set to 0% during that time.
During a press briefing at the beginning of April, then-White House Press Secretary Jen Psaki said that when it comes to an extension to the current pause, the president's administration will "continue to assess" the state of the economy.
"We have a strong recovery, we also understand that there are a range of impacts that are still longer lasting because of the pandemic, including the impacts on costs and inflation," she said. "The Department of Education will look at that and a range of factors as we get closer to that timeline."
Refinancing your private student loans could help you lower your monthly payment. If you're interested in learning more, consider visiting Credible to compare multiple student lenders at once and determine if refinancing is the right option for you.
Biden continues to weigh canceling student debt
Biden told reporters at the White House in early May that although he's considering some student debt cancelation, he wouldn't consider a reduction of $50,000 per borrower.
"I am in the process of taking a hard look at whether or not there will be additional debt forgiveness and I will have an answer on that in the next couple of weeks," he said.
On the campaign trail, Biden talked about canceling $10,000 worth of student loan debt per borrower. While he has since asked Congress to pass a bill to cancel that debt, he has also not ruled out doing so through executive action. Now, borrowers could soon have an answer on the president’s plan for debt forgiveness. Psaki also previously said Biden will make a decision about canceling student loans before the current pause ends on Aug. 31.
If you have private student loans, they will not be affected by any potential student loan debt cancelation, but refinancing can help lower your monthly payments. Contact Credible to speak to a student loan expert and get all of your questions answered.
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