Millions of student loan borrowers remain in limbo as they await a decision from President Biden about whether he intends to extend a payment pause on federal student loans poised to expire at the end of August.
The Department of Education paused federal student loan payments in March 2020 at the onset of the coronavirus pandemic and set the interest rate to 0% during the pause.
The Education Department has provided about $72 billion in relief on student loan interest alone. About 41 million Americans are benefiting from the federal government’s pause of student loan payments, which has been extended six times – twice by former President Trump and four times by Biden.
But the moratorium is officially slated to end Aug. 31, meaning millions of borrowers will need to start making payments on their loans. With just over two weeks until payments resume, Biden has not signaled whether he plans to delay the payment freeze any further.
The White House suggested Tuesday a seventh extension on the payment freeze is still under consideration. Administration officials have promised an answer by the end of the month.
“While I don’t have an announcement here today, I will tell you we’re having conversations daily with the White House, and borrowers will know directly and soon from us when a decision is made,” Education Secretary Miguel Cardona said during an interview on “CBS Mornings.”
The decision comes as Biden faces mounting pressure from progressive lawmakers to not only delay the restart to payments, but to wipe out student loan debt completely for millions of Americans.
Biden campaigned on canceling billions of dollars in student loan debt but has so far erased just a fraction of the pledged amount for about 72,000 borrowers, drawing ire from some progressives.
Outstanding student loan debt has doubled over the past decade, nearing a staggering $1.7 trillion. About one in six American adults owes money on federal student loan debt, which is the largest amount of non-mortgage debt in the U.S. It has been cited as a major hindrance in people’s “economic life” by Federal Reserve Chairman Jerome Powell.
Critics have argued that canceling student loan debt exceeds the president’s authority granted by Congress. Canceling debt would also add to the nation’s already ballooning national deficit, which surged to a record-high $30 trillion last year.