Biden administration remains vague on when student loan repayment will resume as POTUS weighs in on debt cancellation

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The Biden administration remains vague on resuming student loan payments once the current pause ends on August 31. (iStock)

Although the latest pause in student loan payments is currently set to expire at the end of August, President Joe Biden’s administration has remained vague on when payments will resume.

The CARES Act, enacted in March 2020, provided economic relief amid the COVID-19 outbreak and then suspended student loan payments and accrued interest rates for six months until September of the same year. Biden extended it further when he took office, and to date there have been a total of six breaks in payments.

Education Secretary Miguel Cardona said in a recent MSNBC interview that “At some point people are going to have to start paying what they can afford” on their student loans. However, he declined to say whether student loan payments would resume in September, saying department officials were discussing with the White House when to restart payments. He said borrowers would be given “a long on-ramp with clear information” before payments restart.

Federal student loan borrowers could see payments resume in September, and those with private student loans have not fallen foul of the current federal forbearance. If you’re looking for ways to lower your monthly loan payments, you might consider refinancing your student loan. Visit Credible to find your personalized interest rate without affecting your credit score.

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White House hints at another payment break extension

Federal student loan repayments have been on hold for more than 26 months and interest rates have been set at 0% during that time.

During press briefing at the beginning of AprilThen-White House press secretary Jen Psaki said that regarding an extension of the current hiatus, the presidential administration will “continue to assess” the state of the economy.

“We have a strong recovery, we also understand that there are a range of impacts that are lasting even longer due to the pandemic, including cost and inflation impacts,” she said. “The Department of Education will be looking at this and a range of factors as we get closer to that timeline.”

Refinancing your private student loans could help lower your monthly payments. If you want to know more, consider visiting Credible to compare multiple student lenders at once and determine if refinancing is the right option for you.

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Biden continues to weigh student debt cancellation

Biden told reporters at the White House in early May that although he is consider student debt cancellationhe would not consider a reduction of $50,000 per borrower.

“I am carefully considering whether or not there will be further debt forgiveness and will have a response on that in the coming weeks,” he said.

In the election campaign, Biden spoke canceling $10,000 of student loan debt per borrower. While he has since asked Congress to pass a bill to cancel that debt, he also hasn’t ruled out doing so through executive action. Now, borrowers may soon have an answer on the presidential debt cancellation plan. PSAki also previously said Biden would make a decision on student loan forgiveness before the current hiatus ends on August 31.

If you have private student loans, they won’t be affected by possible student loan debt forgiveness, but refinancing can help lower your monthly payments. Contact Credible to speak with a student loan expert and get all your questions answered.

Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

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