That federal student loan repayment pause that President Biden recently extended through August 31? Don’t count on payments restarting on the first day of September.
According to statements made by White House Press Secretary Jen Psaki on the Pod Save America podcast, President Biden will decide to extend the student loan payment pause again (likely through the end of 2022), or cancel some level of student loan debt—and he will make the decision before September.
“Between now and August 31, it’s either going to be extended again or we’re going to make a decision … about canceling student debt”
White House Press Secretary Jen Psaki
“Between now and August 31, it’s either going to be extended again or we’re going to make a decision, as Ron [Klain] referenced, about canceling student debt,” Psaki said on Pod Save America on April 14. She was acknowledging previous remarks by White House Chief of Staff Ron Klain, who said in early April the administration would make a decision before the previous May 1 deadline or extend the pause as well.
Psaki added during the podcast that while the U.S. economy has been making strides in its recovery from the pandemic, including increased job creation, consumer prices have been rising. She said if freedom from student loan payments “can help people ease the burden” of those high costs, “that’s an important thing to consider.”
Psaki said the Biden Administration would prefer that Congress take action to address student loan debt because it’s more permanent. President Biden has called for legislative action to cancel $10,000 in student loan debt per borrower (which would help him keep a campaign promise), but no action has been taken regarding the issue on Capitol Hill.
Many Democrats have long advocated for canceling various levels of student loan debt, and want to see at least $50,000 per borrower canceled, or even wiped out altogether.
Earlier this month, President Biden announced the student loan repayment pause would continue through August—the sixth extension of a pause that began near the start of the pandemic back in March 2020.
The move impacted roughly 41 million Americans who owe a collective $1.6 trillion, but the four-month extension to August 31 is considerably shorter than what many Democrats had been requesting and also sets the stage for another fight over student loan debt relief just months before the midterm elections.
SEE ALSO:
• What SECURE 2.0 and the Loan Extension REALLY Mean for Student Debt
• Biden Extends Student Loan Repayment Pause to September
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
President Ron Klain.