A freeze on student loan repayments will come to an end on August 31, and President Joe Biden is yet to announce whether he’ll be extending the freeze again.
Since loan repayment freezes began at the start of the COVID-19 pandemic, borrowers had been told well ahead of a freeze extension date that the freeze would continue; that isn’t the case this time around, sending lawmakers and borrowers into a frenzy.
Amid the panic, advocates are calling for the Biden administration to decide based on critical financial planning.
One such advocate is Natalia Abrams, president and founder of the Student Debt Crisis Center, who relayed the “stress and anxiety and frankly fear that borrowers are feeling right now.”
Abrams explained the questions anxious borrowers, including: “What do we know? What’s going to happen? What do I need to do to scrounge up money to pay for student loans next month?”
The delay in an update, coupled with the approaching midterm elections less than three months away, has led to speculation an extension could be announced alongside a long-awaited student loan forgiveness plan.
Since being implemented in March 2020, the order, which freezes the accrual of interest on $1.6 trillion owed by 40 million borrowers, has been extended six times.
Indicating that Biden may announce his decision shortly, Education Secretary Miguel Cardona said on Tuesday (August 16) that the President would be making his decision “soon,” but when pressed, Cardona wouldn’t divulge if that announcement included an extension on the freeze.