The Federal Student Loan Pause Is Being Extended Again- New York State
President Biden will allow millions of federal student loan borrowers to pause their payments once again. Here's what we know and how it affects past and present New York State college students.
According to The New York Times, President Biden will extend the pause until August 31st 2022. The delay would be the sixth of the pauses since the early days in the pandemi. It also comes less than a month before payments were scheduled to restart and affect tens of millions of borrowers.
The pauses first went into place to help many who lost their jobs at the beginning of the pandemic and weren't able to make the payments. Both President Joe Biden and former President Donald Trump have taken actions to extend the pause.
Those debts have not been accruing interest, and seven million borrowers in default have received a break from paycheck garnishments and other collection efforts. The extension is expected to be announced this week, according to the administration official, who was not authorized to speak about the plans before the announcement.
The logic to continue with the pauses deals with inflation. Currently in the United States, inflation is running at its fastest pace in 40 years. Financial experts believe that the extension could "add fuel to the hot economy" by keeping money in the hands of consumers who can spend it, instead of paying off the loans.
According to CNN, President Biden is expected to announce the extension on Wednesday (4/6/2022).
The pause costs the government roughly $4 billion a month, according to the Committee for a Responsible Federal Budget."
The Department of Education has said that borrowers can expect to receive a billing statement or other notice at least 21 days before their payment is due.