Time's Running Out for Biden's Decision on Student Loan Payments

Time is running out before the pause on federal student loan repayments ends, and there has been no word from President Joe Biden about whether the moratorium will be extended or if any of the debts are to be forgiven.

"We haven't made a decision yet," White House press secretary Karine Jean-Pierre said earlier this week, CNN reported Thursday. "The Department of Education will communicate directly with borrowers about the end of the payment pause when a decision is made."

She stressed that Biden will be making an announcement "before August 31," but did not say what the announcement will involve, telling reporters that Biden "understands firsthand the burden that a student loan has on families" and that "we're just going to continue to assess our options for cancellation."

But the federal student loan repayment pause will expire in less than three weeks, after Biden has extended the moratorium four times since taking office. The payments have been frozen on most student loan accounts since pandemic lockdowns started in March 2020, with collections on debt and accumulating interest being put on hold.

Biden, meanwhile, will be spending several days between now and the end of the month on vacation, and there is no indication that a decision on student loan payments will be made during that time.

The White House, meanwhile, has suggested that the president is considering the cancellation of $10,000 per borrower, who must earn less than $125,000 a year to qualify.

Normally, loan servicers send out billing statements at least 21 days before a payment is due, but those haven't gone out yet since Biden is still making up his mind.

Scott Buchanan, executive director of the Student Loan Servicing Alliance, told CNN that for several weeks, servicers have been told to hold off any mailings concerning resuming loan payments, and that has not changed.

Biden also has not been able to get Congress to approve most of his proposals on making college affordable, including through the recent Inflation Reduction Act, which did not include provisions that had been proposed to lower the cost of college.

Meanwhile, there are targeted debt forgiveness programs, which were temporarily expanded under Biden, and so far, since he took office, more than 1.3 million borrowers have been able to obtain cancellation agreements, totaling $26 million.

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