Published: 06th April 2022
USA expected to extend pause on payment of student loans through August
Until August 31, 2022, borrowers will not be asked to make payments while interest rates are expected to remain at 0 per cent during that period
It was early in the pandemic that student loan payments in the United States of America (USA) were halted and they were slatted to resume from May 1. But the Joe Biden administration is now planning on freezing federal student loan payments through August 31, as per an administration official who is familiar with the decision making of the White House.
This means that the moratorium that allowed millions of Americans to postpone payments while the pandemic was wreaking havoc, might be extended.
While student loan payments were scheduled to commence from May 1, after calls from Democrats, the White House has plans to allow some more time for borrowers to prepare for paying their loans.
How many Americans can this impact? The action will apply to over 43 million Americans who owe $1.6 trillion in student debt, collectively, held by the federal government, as per the latest information from the Education Department.
The huge number also includes the seven million plus borrowers who have defaulted on student loans, meaning, that they are at least 270 days behind on their payments.
Until August 31, borrowers will not be asked to make payments while interest rates are expected to remain at 0 per cent during that period. The extension was reported on Tuesday, April 5, by Bloomberg.