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Education Dept. gives another sign student loan payments may not restart in May


Washington, D.C.: The U.S. Department of Education

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According to two sources familiar with the matter, the U.S. Department of Education directed companies servicing federal student loans to not send notices regarding payments starting in May.

Now, service providers who would have sent reminders to borrowers at end of each month are holding back.

This news indicates that the Biden administration may reconsider extending federal student loan borrowers’ payment pause. The exact amount of time borrowers will have to wait is unknown.

Most federal student loan holders are now able to choose not to pay the monthly bills. Interest has been prohibited from accruing on the debt since March 2020 when the outbreak of coronavirus infects the U.S.

A spokesperson said that the Education Department would continue to communicate regularly with servicers regarding “the type of outreach” for borrowers. 

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The five-year reprieve that has already impacted more than 25,000,000 Americans was extended five times during the current public health crisis. It is scheduled to expire on May 2.

White House Chief-of-Staff Ron Klain, however, stated that earlier this month the Biden administration would make its decision about debt cancellation before turning the payments on.

Klain stated, “The president will look at student debt prior to the expiration of the pause or he’ll prolong the pause.” said on the podcast “Pod Save America.”

While President Joe Biden had promised that he would quickly cancel 10,000 loans for each borrower during his campaign, he is now being pressured by some Democrats to do more. Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., are pushing him to cancel up to $50,000 for all.

A recent poll found that nearly 66% 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.

Thomas Gokey co-founder of The White House, stated that for the moment, the White House has responded to the pressure. Debt CollectiveA national alliance of creditors.

They were insistent that they extended the payment pause a few months back the last timeGokey stated,