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The Federal Student Loan Pause Will End Later This Year

The Federal Student Loan Pause Will End Later This Year

The much-debated pause on federal student loan payments will expire later this year, according to Education Secretary Miguel Cardona.

The pause has been in place for over three years now, with not one, not two, but eight extensions added to it. Recent records show that approximately 44 million individuals owe $1.6 trillion in student debt.

So, when will the repayment nightmare resume, you ask? Well, it all hinges on a little thing called “litigation.” The Supreme Court is currently examining the Biden administration’s one-time student loan forgiveness program, and once they deliver their ruling, the countdown begins. Payments are set to resume 60 days after the Supreme Court issues its ruling, or 60 days after June 30 – whichever comes first. The justices are expected to rule in late June or early July, but a decision could come earlier.

In the event that the Biden administration is greenlit to proceed with their loan forgiveness plan, low- and middle-income borrowers could be in for a treat by receiving up to $20,000 in debt relief before payments restart.

Once the pause ends, borrowers will have once again navigate the world of federal student loan payments, and it looks like there will be quite a bit of chaos. Millions of borrowers may be confused about how much they owe, when to pay and how, and the process has changed so much over the last few years that many will have a different servicer handling their student loans since the last time they made a payment.

Acknowledging the chaos on the horizon, Cardona expressed empathy for borrowers during a recent Senate Appropriations subcommittee hearing.

“We recognize that our borrowers need information. And they need a long on-ramp because it has been three years,” Cardona said. “We do plan on making sure it’s a smooth reentry to repayment, and we’re prepared at FSA to provide the support that students need.”

Federal student loan borrowers can check the FSA website for updates on resuming payments.


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