They were first paused in March 2020 due to the Coronavirus pandemic and since that decision was taken, they have been rescheduled six times by the Trump and Biden administrations.
In theory, they should be resuming in September. Some experts feel that the government will continue the moratorium though beyond September.
Will student loans resume in September?
“The Department of Education will continue to assess the impacts of the COVID-19 pandemic and the economy on student loan borrowers,” a spokesperson told CNN on July 25.
The rep added that the DoE will “communicate directly with borrowers about the end of the payment pause when a decision is made.”
It was reported by Bloomberg that President Biden is thinking of extending the pause on student loan repayments until the end of 2022 or even until the summer of 2023.
The moratorium has halted payments and interest for 35 million Americans and suspended collection efforts against the 7 million borrowers currently in default. Nearly 200 billion dollars in loans have been deferred in all, according to an analysis from the Federal Reserve Bank of New York.
Why are student loans paused?
President Donald Trump first enacted the pause on student loans in March 2020 and extended it twice through January 2021. Biden has extended the pause four more times since taking office.
The Biden administration initially warned that the extension through January 2022 would be the last, but with the omicron variant of COVID-19 sweeping through the US last year, Biden decided to continue the moratorium until May 1, 2022.
A letter was sent by a series of top Democrats on March 31 calling for the White House to extend the moratorium.
“Restarting repayment will financially destabilise many borrowers and their families, and will cause hardship for many who could not afford repayment,” the letter said.