Will Student Loan Payment Pause Be Extended?

The Education Department confirms that the Student Loan Payment Pause for three years is officially ending later this year and advising borrowers to prepare in restarting payments.

Will Student Loan Payment Pause Be Extended? (PHOTO: Money)

Student Loan Payment Pause Will No Longer Be Extended This Year

On Thursday, Miguel Cardona the Secretary of Education claimed prior Senate Committee on Appropriations that the process to begin collecting payments again will start no later than June 30. Moreover, he also announced that after a three-year Student Loan Payment pause and interest on federal student loans this year it will no longer be extended.

Moreover, the exact date for the Student Loan Payment pause restart is still up to the decision depending on when the U.S. Supreme Court releases President Joe Biden’s debt relief plan. However, Cardona stated that the payments are set to return 60 days after the court completes its decision or 60 days after June 30, so the bills might proceed in August or September.

President Donald Trump was the first to order to pause the federal student loan payments in response to COVID-19, which has been extended eight times. Hence, several borrowers have doubted Biden’s loan forgiveness plan saying “It’s too good to be true” or could the plan survive legal challenges. Still, a lot also hoped for it, or at least get a further extension on the payment pause. Cardona’s comments this week put that idea to rest.

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Here is What Borrowers To Expect From The Student Loan Forgiveness

After the student loan payment pause, it will cancel up to $20,000 in debt for some borrowers, and it would cost the federal government roughly $400 billion, according to the Congressional Budget Office.

An estimated 20 million borrowers or the early half of all federal student loan borrowers, can benefit from their balances completely wiped out if the administration is allowed to carry out its plans according to the Education Department reported by Money News.

Cardona also reiterated the Biden administration’s plans to give new and improved the student loan repayment system over the next several years, including changing the details of income-driven repayment.  It could reduce half of the monthly payment for undergraduate borrowers. Borrowers who earn $30,600 below annually and any borrower in a family of four earning less than $62,400 annually could have $0 monthly payments.

Cardona wants to emphasize the urgency of the $2.65 billion budget request by the Department of Education to use in enhancing the system and upgrade it to have a larger system overhaul.

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