WASHINGTON – For nearly two years, most student loan borrowers have been spared the obligation of making payments on their balances. Their interest rate has been frozen, and for the millions in default, the collection calls have stopped.
That officially ends in February. As President Joe Biden’s administration promised, the payment process will restart for 41 million Americans, White House press secretary Jen Psaki said last week during a news briefing. More details about how the restart will work will be released in the coming weeks, the Education Department said in a statement Wednesday.
Some borrowers had hoped the pause on payments would be extended. There is precedent. President Donald Trump’s and Biden’s administrations had extended the moratorium weeks before payments were expected to resume. Wednesday, liberal Democrats asked Biden to issue another extension, citing the economy and uncertainty around the omicron variant of the COVID-19 virus, Politico reported.
The administration has long broadcast its plan to resume payments Feb. 1. “A smooth transition back into repayment remains a high priority for the Administration,” the Education Department said Wednesday.
While payments were paused, the nation’s $1.7 trillion student loan debt portfolio kept growing. Left-leaning lawmakers have pushed Biden to use his executive power to forgive student loan debt en masse. Critics of loan forgiveness say such a move would be a one-time solution and disproportionately benefit those with higher wages and loan balances.
When do student loan payments resume? What if I can’t afford them?
That answer will vary from borrower to borrower, but many payments will resume in February. The Education Department said borrowers will receive some form of notice at least 21 days before their first payment is due. Borrowers can contact their loan servicer for the exact date their payments restart.
Those seeking relief from their student loan payments – for instance, because they don’t think they can afford them – will probably have to rely on one of the government’s income-based repayment programs. The federal government has started informing borrowers about the income-based repayment plans available to them….ReadMore…
