The situation is that we’re almost 30 days away from the planned resumption and the department has been telling servicers to hold off on resumption communications for the last few months.Scott Buchanan, head of a loan servicer industry group. Most student loans have been on hold since March 2020, but the freeze is scheduled to end soon. The Biden admin has hinted at extending the freeze or canceling an unspecified amount for qualified borrowers.
Why It Matters: The original extension deadline is set to expire on August 31. Contractors have been told to refrain from sending statements, furthering speculation that the Biden administration plans to roll out student loan forgiveness or extensions ahead of midterm elections.
- How many people does this impact? About 1 in 5 Americans have student loans. Over half of those who owe money have less than $20,000 remaining. Which age group owes the most? People between the ages of 25 and 34 — about 33% of borrowers.
- The debate: Over 50 Democratic members of Congress wrote a letter last month asking for a comprehensive plan for how and when student loans should be modified. Republicans have criticized the Biden administration’s possible proposals. Rep. Kevin Brady (R-Texas) recently stated, “Pursuing mass student loan forgiveness ignores the very problems most Americans are facing in what is proving to be a very cruel economy.”
- Big Picture — a developing story: Announcements regarding the future of student loans are expected in the coming weeks/months. We will continue to monitor the story and update as more information becomes available.
Who has student debt in America? (May 2022 – Washington Post)
by Jenna Lee,