Student loans: Will the current pause on payments be extended?


Student loan payments have been paused since March 2020, part of federal pandemic relief signed into law.  There hasn't been guidance on when, or if, payments will restart.

Student loan payments have been paused since March 2020, part of federal pandemic relief signed into law. There hasn’t been guidance on when, or if, payments will restart.

The clock is ticking … student loan payments are set to restart in a month. Be ready and see where things stand.

TO SUM IT UP

  • President Joe Biden is planning to announce a student loan forgiveness program by the end of the month. That’s when the current payment break is up.
  • One possibility: $10,000 in relief for some borrowers.
  • Some advocates say that it doesn’t go far enough and are concerned with the lack of details so far.

THE BACKGROUND

  • Student loan payments have been paused since March 2020, part of federal pandemic relief signed into law by former President Donald Trump and extended by Biden.

  • There hasn’t been guidance on when, or if, payments will restart.
  • It’s reported that Biden will give borrowers making under $150,000 about $10,000 in relief. But his administration has been mostly quiet on specifics.

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A 2022 study found most Gen Z and millennial borrowers delayed a major financial decision because of their student loan debt.

WHAT’S HAPPENING

  • Experts say the break will likely be extended for a seventh hour.
  • Why? Those reasons cover the midterm elections, rising inflation and lack of communication from loan servicers.

  • Still, canceling the debt doesn’t attack the rising cost of higher education.

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The millions of Americans burdened with student loans hold more than $1.7 trillion in debt.

WHY IT MATTERS

  • The millions of Americans burdened with student loans hold more than $1.7 trillion in debt. Most of that is federal.

  • A 2022 study found most Gen Z and millennial borrowers delayed a major financial decision — such as buying a house — thanks to their student loan debt.

  • 59% of graduates with debt said higher education improved their opportunities in the workplace. 10% said they regretted it.
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Experts say the break will likely be extended for a seventh hour.

SOURCES

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Lawmakers have appealed to President Joe Biden.

READ MORE ABOUT THIS IN THE SUM

The Sum breaks down complex economic issues and how they impact your life in just a few minutes a day. Follow thesum.news on Instagram for the full story.

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The Sum breaks down complex economic issues and how they impact your life in just a few minutes a day. Follow @thesum.news on Instagram for the full story.

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