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Student Loan Moratorium Extended Through End of August

President Biden recently announced the federal pause on student loan payments will be extended until the end of August. Officials of the Biden Administration have been weighing this idea for several months now, struggling with deciding if they should extend the moratorium and if so, how long they should extend it.


For borrowers, payments along with interest accrual have been rested since March of 2020. This pause was set to expire at the beginning of May, however, as the 90- day extension that began in March is coming to an end. The sum of federal student debt is approximately $1.6 Trillion, with over 40 million borrowers nationwide. The total student debt is more than total credit debt and automobile debt respectively. Roughly 90 percent of student loans are federal student loans.

It is important to note the pause does not apply to borrowers who have private student loans. Some private lenders and servicers have shown flexibility to their borrowers who are asking them to suspend these loans in the same way federal loans are being suspended.

Moratorium Keeps Getting Extended

The initial pause of the federal loans was implicated as a relief package when the pandemic started, but most of the other relief packages that were introduced have concluded, such as unemployment benefits. The student loan moratorium is now one of the only packages that started during the pandemic that is still available. This recent extension is the fourth time that Biden & his administration have decided to extend, with the Previous president also extending the moratorium twice at the beginning of the pandemic.

Push for Permanent Cancelation

Efforts are being made in Congress to cancel student debt altogether. Members of Congress are putting pressure on the current administration to cancel at least $50,000 of debt for each federal borrower. Key members of the house and senate committees that have authority over the education department have been pushing the president to make this pause long-term while the education department improves.

Although the push for freezes and halts in payments have been spoken about, this has not stopped some borrowers from paying off their loans, with one of the main reasons being skepticism over the cancellation, and others believing that getting ahead of the debt now will ultimately benefit them by reducing possible interest accrual. A lot of borrowers believe that this pause is not going to be permanent as talks of canceling debt have been circulating for a long time with no inertia to validate the claims.

Wrap Up

With the student loan moratorium being extended to August, many Americans are being provided some relief they’ve been so desperately seeking. It will be interesting to see if federal student debt does get canceled universally as it has been for borrowers of certain groups such as public service workers or people with disabilities.  Do you think it is a good idea to cancel federal student loans entirely?

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