Borrower balances have effectively been frozen for more than two years, with no payments required on most federal student loans since March 2020 — when the coronavirus pandemic sent many Americans into lockdown. During this time, interest stopped accumulating and collections on defaulted debt have been on hold.
Now, as borrowers’ fates hang in the balance, the President is set to spend several days on a long-awaited vacation. And the Biden administration has not sent any signals to suggest they’ll announce a student loan decision while he’s away.
Biden has already extended the pause four times and has repeatedly argued that it was necessary to allow borrowers to get back on their feet. In April — when he last extended the repayment pause — he said that though the economy had gained strength, the country was “still recovering from the pandemic and the unprecedented economic disruption it caused.”
“We haven’t made a decision yet. … The Department of Education will communicate directly with borrowers about the end of the payment pause when a decision is made,” White House press secretary Karine Jean-Pierre told reporters on Tuesday. “When it comes to the cancellation… the President firsthand understands the burden that a student loan has on families… and so we’re just going to continue to assess our options for cancellation.”
Jean-Pierre emphasized that Biden will have something to announce “before August 31.”
With only three weeks until student loan servicers are scheduled to resume collecting federal student loan payments, Biden and his team are cutting it close. Normally, loan servicers send out billing statements at least 21 days before a payment is due, but those have n’t gone out yet since Biden is still making up his mind about him.
“For many weeks, there’s been no change in the guidance from the Department of Education. Servicers have been told to hold off on sending out any communication about the resumption of payments,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a nonprofit trade group whose members are responsible for servicing over 95% of all federal student loans.
While Biden didn’t announce a decision on student loans announced before he ditched Washington for the beaches of South Carolina on Wednesday, he’s riding into his vacation on the headwinds of a few successful and chaotic weeks at the White House.
Americans’ attitudes toward student debt relief are sharply divided along partisan and generational lines.
Outside of the payment pause and an executive action to broadly cancel student loan debt, there are several other ways many of the 43 million federal student loan borrowers may qualify for some student loan forgiveness. Targeted debt forgiveness programs already exist that help public sector workers and borrowers who were defrauded by their for-profit college, for example.
CNN’s Ariel Edwards-Levy contributed to this report.