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Why the White House may extend the payment pause for student borrowers


U.S. President Joe Biden.

Kevin Lamarque | Reuters

Latest newsSurprised that the White House was considering increasing the student loan payment pause, some people were surprised.

Biden has insisted that the bills would be resumed on May 1, pointing out the historic economic recovery.

Experts warn that it is logistically and politically difficult to reinstate student loan payments for the millions of Americans who have had their loans stalled for over two years. Borrowers may no longer have to be concerned about payments for many months.

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These are just a few reasons why another extension might be possible.

1. Biden continues to weigh student loan forgiveness

White House Chief Of Staff Ron Klain stated earlier in the month that the Biden Administration wanted to cancel its debt before turning the payments on.

Klain: “The President is going to examine what we should do about student debt before it expires or he will extend the pause.” said on the podcast “Pod Save America.”

Administration may hold off on payments as it’s not yet ready to declare its plans for forgiveness.

Although President Joe Biden said he would cancel $10,000 for every borrower on the campaign trail, some Democrats are urging him to take out even more.  Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., are pushing him to cancel up to $50,0000 for all.

Mark Kantrowitz, a higher education expert said that resuming bills and later decreasing or eliminating people’s loans balances can lead to confusion.

He said that “ideally, the federal government would forgive student loans before the interest waiver expires and the payment pause ends.”

Kantrowitz stated that politics is driving the reasons for further extensions, but not policy.

He said, “Restarting your repayments while not forgiving student loans is a great opportunity to give the progressives an additional platform to attack the Biden administration.”

2. Mid-terms are coming!

The Government Accountability Office foundHalf of those with federal student loans may be at higher risk for delinquency if they aren’t paid back. The Biden administration won’t like to have headlines on this as the election approaches.

A recent poll found that nearly two-thirds of likely voters are in support of Biden canceling some or all of student debt, with more than 70% of Latino and Black voters in favor.

3. Many loan servicers have changed

Three companies that serviced federal student loans — Navientthe Pennsylvania Higher Education Assistance Agency (also known as FedLoan) and Granite State — all recently announced that they’d be ending their relationship with the government.

This will result in around 16,000,000 borrowers having their accounts transferred from one company to another.

The transitions remain in progress and the extension of the pause might give government officials and servicers additional time to prepare for the return of payments.

Kantrowitz stated that borrowers may be confused by changing their loan servicer or restarting repayments at the same time.