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Biden May Extend Student Loan Pause into 2023, Among Other Relief

As it stands, the pause on federal student loan payments is set to expire on August 31st, but it seems as though the Commander in Chief is heavily considering extending that pause until 2023. Following the CARES act in March 2020 the original pause was only set for 6 months, but then president Donald Trump as well as current president Joe Biden, both issued several short-term extensions since then.

The Extension

The Biden Administration seems to be pointing in the direction of an extension of the pause. This was signaled earlier this week when the Education Department reportedly notified its contracted student loan servicers to not send out billing notices to borrowers, a sign that it does not anticipate asking borrowers for payments in the near future. Top administration officials have emphasized over the past few months that borrowers will have advanced notice and ample opportunity to prepare before billing continues again.

If Biden was to follow through with the extension, reports indicate it could be extended through the summer of 2023, almost an entire additional year. July 1, 2023, is a key date for borrowers as this would be the earliest that an overhaul of several federal student loan programs would be in effect. This overhaul would include changes and improvements to multiple student loan forgiveness programs.

Other Measures For Loan Forgiveness

Something that has been previously spoken about as well, is still being considered by the Biden Administration. That is the campaign to support a $10,000 federal loan forgiveness program for most of its borrowers. This campaign has come to a halt, however, with Biden stating the uncertainty about whether he has the legal authority to follow through. “As far as [student] loan cancellation, [President Biden] understands what this means for families, how burdensome this can be,” said White House Press Secretary Karine Jean-Pierre. “He said himself, by the end of August, so that’s right around the corner… He’ll make a decision.”

Wrap Up

This is welcomed news for most of the federal student loan borrowers out there, and it shows the Biden Administration hasn’t forgotten about it and is working on ways to bring much-needed relief to everyone involved.  However, there is still some opposition from Republicans as Biden is looking to make this move ahead of midterm elections, potentially assisting them to fill the House and Senate with more of their party members.

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