Decision on Student Loans Coming in 'Next Week or So'

Nobody has been required to make a student loan payment since March 2020
By Mike L. Ford,  Newser Staff
Posted Aug 22, 2022 3:00 AM CDT
Decision on Student Loans Coming in 'Next Week or So'
Education Sec. Miguel Cardona speaks at an event where Vice President Kamala Harris announced the cancelation of all federal student loans borrowed by students to attend any Corinthian Colleges, June 2, 2022, at the Department of Education in Washington.   (AP Photo/Jacquelyn Martin, File)

The Biden administration will announce something about student loans "within the next week or so." Per the Hill, Education Secretary Miguel Cardona promised on Sunday's Meet the Press that an announcement is forthcoming ahead of an Aug. 31 deadline, after which loan payments are scheduled to resume. The news may be of interest to the 45 million Americans who together hold about $1.7 trillion in federal student loan debt. That’s an average of $37,777 per borrower, but some owe a lot more than that, particularly those who have graduated since March 2020. That's when Congress instituted a moratorium on loan payments through the Cares Act stimulus, which also included 0% interest on existing balances, per Forbes.

Former President Trump extended the “pause” twice; President Biden has already extended it four times, and it’s hard to imagine a political adviser who would not suggest extending it again two months from midterms. But loan forgiveness is also a pressing issue for many Democrats, some of whom are pushing for $50,000 per borrower, while Biden has put $10,000 on the table. Biden has taken some modest steps on loan forgiveness already, including about $35 billion to help borrowers who were defrauded and $10 billion to fulfill promises made through the Public Service Loan Forgiveness program aimed at teachers, nurses, and other public servants.

As Inside Higher Ed reports, the issue is of particular interest to many younger Black and Latino voters, and a big announcement could help alleviate “waning faith in the president” among key voting blocs. It may not rate high among “pressing issues,” but a February survey of more than 23,000 student loan borrowers found some 92% of borrowers were “concerned” about whether they would be able to afford resumed payments amid inflation. According to a separate Forbes report, Republicans are pushing their own ideas, including a “blockbuster” 10-point plan that calls for an end to the payment pause, zero loan forgiveness, an end to the PSLF program, and the creation of “a new, single income-driven repayment plan.” (More student loans stories.)

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