Student loan payment pause will end this year, education secretary confirms

WASHINGTON -- The pause on federal student loan payments is still set to end later this year, Education Secretary Miguel Cardona confirmed this week.

The pandemic-related pause has been in place for more than three years and has been extended eight times - even sometimes after the Biden administration declared the latest extension was final.

But Cardona reiterated Tuesday that the current timeline remains in place. It ties the restart date to litigation over the administration's separate, one-time student loan forgiveness program, which has been taken up by the Supreme Court.

Payments are set to resume 60 days after the Supreme Court issues its ruling, or 60 days after June 30 - whichever comes first. The justices are expected to rule in late June or early July, but a decision could come earlier.

"We communicated that after the Supreme Court decision is made, loan repayments will start within 60 days of the decision," Cardona said when pressed during a hearing held by the House Committee on Education and the Workforce Tuesday.

If the Biden administration is allowed to move forward with the loan forgiveness program, low-and middle-income borrowers may be eligible for up to $20,000 in debt relief before payments restart.

Last week, Cardona also confirmed the restart date at a Senate Appropriations subcommittee hearing.

"We are committed to making sure that once a decision is made, that we are going to resume payments 60 days after. But no later than June 30, we're going to begin that process," he said.

Restarting payments will be an unprecedented task

When the pause ends, roughly 44 million people will have to restart making payments on their federal student loans, and there is some concern about whether the process will go smoothly.

Many people may be confused about how much they owe, when to pay and how. Millions of borrowers will have a different servicer handling their student loans since the last time they made a payment. Missing payments can result in monetary fees.

Congress appropriated the Federal Student Aid office about $800 million less than what the Biden administration had asked for this year, keeping the office's operating budget the same as last year even though there will be more work to do. Some student loan servicers have recently cut back on customer service hours, adding to the fear of a bumpy return to repayment.

"We recognize that our borrowers need information. And they need a long on-ramp because it has been three years," Cardona said last week.

"We do plan on making sure it's a smooth reentry to repayment, and we're prepared at FSA to provide the support that students need," he added.

Student loan experts recommend that borrowers reach out to their student loan servicer with any questions about their loans as soon as possible, especially if they are interested in enrolling in an income-driven repayment plan. Those plans, which set payments based on income and family size, can lower monthly payments but require borrowers to submit some paperwork.

Federal student loan borrowers can check the FSA website for updates on resuming payments.

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