Student Loan Payment Break: What to Expect

Here’s what to expect with the student loan payment pause.

Here’s what you need to know – and what it means for your student loans.

student loans

This week could be the most significant time in student loan history. President Joe Biden is considering two key proposals that could impact more than 40 million student loan borrowers. First, Biden is considering whether to extend the student loan payment pause, which could delay the resumption of federal student loan payments. Second, the President is considering whether to enact a sweeping student loan ordinance. There are several reasons Biden could extend the student loan payment pause and enact a large-scale student loan foreclosure. Here are some student loan payment pause predictions.


1. Student Loan Payment Pause: Expect Biden to announce his decision this week

The student loan payment pause ends August 31, 2022. Without an extension, student loan payments for state student loans will resume on September 1. US Secretary of Education Miguel Cardona confirmed yesterday that Biden will announce his decision on student loan payments this week.


2. Biden could extend student loan payment pause again

Expect Biden to extend student loan payment pause again The Biden administration has been relatively quiet on whether the president will extend the student loan payment pause. When Biden extends student loan payment pause, expect these 5 things. Federal student loan payments have been temporarily suspended since March 2020, when Congress approved historic student loan relief. President Donald Trump and Biden have jointly extended student loan payments six times. Typically, student loan borrowers were given at least several weeks’ notice of previous extensions. With student loan payments set to resume next week, Biden is unlikely to phase out student loan payments with just a few days’ notice. The Department of Education also notified student loan service providers — the companies that collect student loan payments — not to send federal student loan bills to student loan borrowers. Borrowers not receiving their student loan bills is another sign Biden could agree to a seventh extension of the student loan payment pause.


3. The student loan payment pause may last several months

If the President extends the student loan payment pause, expect an extension of several months. Republicans have criticized a possible extension of the student loan moratorium, calling it financially irresponsible and a ploy by Democrats to win votes in November’s midterm elections. Democrats say student loan borrowers are struggling amid the ongoing Covid-19 pandemic and are unwilling to resume student loan payments. Like Sen. Elizabeth Warren (D-MA), Biden is also concerned about student-loan borrowers facing student-loan defaults, which is why he’s giving them a “fresh start.” If Biden extends the student loan payment pause, he will likely extend beyond the Nov. 8, 2022 election. A logical deadline could be December 31, 2022. As this day is a public holiday, Biden could alternatively choose January 31, 2023.


4. If Biden extends the student loan payment pause, expect it to be the final pause

Never say never, but if Biden extends the student loan payment pause, expect to do so until the final extension. Biden may not call the potential extension “final,” but you should plan for student loan payments to resume after that. Biden could weigh several factors when deciding whether to extend the student loan payment pause. For example, Biden will likely factor in the economy, inflation, the Covid-19 pandemic, and student loan disruption costs, among other things.


Student loans: next steps

The next step for your student loans is to follow Biden’s student loan pause announcement, which could happen any day. The US Department of Education should also contact you in writing regarding the status of federal student loan payments. If you have any questions, please contact your student loan administrator. Importantly, there is no guarantee that the student loan payment pause will last, or for how long. Also, the student loan payment pause is temporary. Therefore, you need a long-term strategy to pay off student loans. These are some of the best ways to save money and pay off student loans faster:


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