- Student loan payments are set to continue after one month.
- Biden said he is planning to announce student loan forgiveness earlier.
- He is reportedly considering a $10,000 bailout for borrowers earning less than $150,000 a year.
It’s August, and for student loan borrowers, that means one thing: President Joe Biden has a month to announce whether he’ll cut their loan balances.
It was a long-awaited announcement. While Biden told reporters in July he would announce a bailout decision before payments resume on September 1, borrowers, lawmakers and lenders alike. Students are increasingly worried as the clock continues to tick towards that date without any guidance from the White House, with a lot of uncertainty surrounding how effectively debt forgiveness can be accomplished within a short period of time. such a short notice.
Ever since Biden said in April he would make a decision on student loan forgiveness “in the coming weeks,” many borrowers have been anxiously awaiting details on what the actual relief will look like. and when will it affect them. While the only certainty Biden has offered so far is what will not be relief – $50,000 in debt cancellation – he was supposed to considering $10,000 forgives borrowers making less than $150,000 a year, an amount he pledged while on the campaign trail.
In June, Biden confirmed told reporters that he was about to decide on a bailout, and during a White House press conference last week, Karine Jean-Pierre, the White House press secretary, told reporters that “regarding the loan cancellation, Biden understands what this means for families, how it can get heavy. I just don’t have anything more to share. late August, so that’s going to happen… He’s going to make the decision.”
Biden has extend the suspension of student loan payments four times and there was speculation he would do so again after it was reported that his Department of Education had told loan companies pause texting around the payment restart on September 1. But Education Secretary Miguel Cardona promised borrowers are “highly informed” of any bailouts, and advocates and lawmakers on both sides of the aisle have express concern with no announcements and details surrounding any loans Biden is planning.
Student loan companies are also hoping for guidance. Scott Buchanan, executive director of Student Loan Servicing Alliance – a trade group that represents federal student loan service providers – told Insider that communication about the relief was long overdue. .
“We need to contact the borrowers. We should have done that a month ago,” Buchanan said. “And that needs to happen. At this point, until the White House issues any other instructions, the payments will continue on September 1. And we need to tell the borrowers. know how they can reach their waiters, how they can ask questions, what payment plans are available to them, and all those types of communication that need to take place.”
But recently Politico disclosure that while Biden may not have made a final decision on the bailout, the Department of Education is ready to act as soon as he does. According to an internal memo obtained by Politico, the department plans to implement the write-off within months of Biden’s announcement. Borrowers with income information available can expect quick relief, while others will be able to apply online to self-claim their income.
However, department officials told Politico that nothing is final yet and that some supporters are using the opportunity to push Biden one last time to do as much debt relief as possible. Derrick Johnson, president of the NAACP, Written to Biden last week to urge him to cancel at least $50,000 in student debt without any income cap.
“The American people are worried. Voters are worried. Your establishment is worried,” Johnson Written. “Prolonging the freeze will only prolong the anxiety that millions of Americans feel.”