Student loan payments suspended during the COVID outbreak will resume this year, according to a Biden administration official who spoke before the Senate this week.
Education Secretary Miguel Cardona stated that the current student loan payment suspension will last for 60 days beyond June 30 or until the Supreme Court rules on the White House’s expansive student loan forgiveness scheme. This judgment is anticipated before the end of June.
The restart has been delayed eight times, but Cardona said it will not be pushed back a ninth.
“We recognize that during the pandemic that was very difficult for borrowers. And we are committed to making sure that once the decision is made, that we’re going to resume payments for 60 days after, but no later than June 30,” Cardona said, referring to the Supreme Court decision. “We’re going to begin that process.”
“We recognize that our borrowers need information and they need a long on-ramp because it has been three years of resuming payments. We’re confident … that the Supreme Court will rule in favor of the targeted debt relief, providing relief for millions of borrowers, and we want to make sure that the information that borrowers get is accurate,” Cardona said. “We do plan on making sure it’s a smooth reentry to repayment.”
“The emergency period is over and we’re preparing our borrowers to restart,” he added.
According to Insider, the education government has already begun communicating with student loan businesses to assist debtors in preparing to resume payments. Companies should prepare to commence charging interest on borrowers’ debts in September, with the first monthly payments due in October, according to the department.
The Biden plan, which is currently before the Supreme Court, would forgive up to $10,000 in student loan debt for individuals earning less than $125,000 or households earning less than $250,000. People who obtained Pell Grants in college are eligible for loan forgiveness of up to $20,000 per year.