Student-loan borrowers will know 'soon' if the debt payment pause will be extended before it expires in 2 weeks, Biden's Education Secretary says

·3 min read
Education Secretary Miguel Cardona.
Education Secretary Miguel Cardona.Joshua Roberts/Getty Images
  • Education Sec. Miguel Cardona told CBS student-loan borrowers will know "soon" of a payment-pause extension.

  • The pause is set to end in just over two weeks, after August 31.

  • Cardona said in June that borrowers would have "ample notice" regarding an extension.

In June, President Joe Biden's Education Secretary Miguel Cardona said student-loan borrowers would have "ample notice" on a possible payment pause extension.

Two months later — and with payments set to resume in just over two weeks — Cardona said borrowers will know "soon" if they have to restart paying off their debt.

"While I don't have an announcement here today, I will tell you that we're having conversations daily with the White House and borrowers will know directly and soon from us when a decision is made," Cardona told CBS News on Tuesday morning.

When asked about the reasons for the hold-up on the announcement, Cardona added that he "can't get into the conversations we're having daily, but I will tell you that from day one, the president's been very clear about making sure we're leading with students first. And we've been proud of the $28 billion in loan forgiveness up to this point and the policies that we've changed to fix a broken system. So we recognize Americans are waiting on that and we're going to be communicating with them as soon as we can."

In April, Biden extended the student-loan payment pause for his fourth time, through August 31, and there has been speculation the pause will be once again pushed back after the Education Department sent guidance to loan companies instructing them to halt messaging surrounding the repayment date.

Along with an extension, Biden is also expected to announce whether he will cancel student debt for federal borrowers broadly — reportedly considering $10,000 in relief for borrowers making under $150,000 a year — and the president has said that decision will be made before August 31.

Still, borrowers are left in limbo with the payment restart date quickly approaching. As Insider previously reported, this is the closest it has ever been to payments resuming without an update from Biden, and Democratic lawmakers and advocates have been pushing the president to deliver that relief so millions of borrowers can have financial certainty.

At the end of July, 107 Democratic lawmakers wrote to Biden saying borrowers should not have to resume payments as inflation remains high, and Rep. Cori Bush of Missouri wrote on Twitter on Monday that "millions of people are living in limbo, unsure if student loan payments will resume in 16 days. Canceling student debt would provide immense relief to numerous borrowers."

Student-loan companies are awaiting guidance, as well — the Student Loan Servicing Alliance, which represents federal loan servicers, wrote on Twitter on Tuesday that "student loan servicers need ED guidance NOW to prepare and support borrowers through upcoming program changes." While news from the department may be lacking at the moment, some prominent loan companies are still anticipating a payment pause extension. During second quarter earnings calls, the CEOs of Navient and SoFi both said they see an extension through 2023 as likely and are preparing for that to be the case.

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