The multi-year pause on federal student loan payments is set to expire next week on Aug. 31.
WASHINGTON — With just over a week left to go until the deadline, the U.S. education secretary says Americans can expect an announcement on student loans “in the next week or so.”
The yearslong pause on federal student loan payments is set to expire on Wednesday, Aug. 31, and millions of Americans are anxious to know whether it will continue — and whether a more permanent solution is in the works.
“We know Aug. 31 is a date that many people are waiting to hear something from,” Education Secretary Miguel Cardona said Sunday on NBC’s Meet the Press. “We’ve been talking daily about this, and I can tell you the American people will hear within the next week or so.”
Cardona, who had made a similar statement last week, declined to share further information.
“I will tell you, the American people will hear directly from us, because we recognize th is is an important issue across the country,” he said.
This is by far the closest the deadline has been during Biden’s presidency without an update — including when Biden extended the pause on his first day in office.
The Trump administration initially gave Americans the option to suspend loan payments in March 2020 as “stay at home” orders were implemented during the early days of the COVID-19 pandemic, and Congress made it automatic soon after. It has been extended multiple times under both administrations.
More than 43 million Americans owe a combined $1.6 trillion in student debt held by the federal government, according to recent data from the Education Department. That includes more than 7 million borrowers who have defaulted on student loans, meaning they are at least 270 days late on payments.
During the moratorium, borrowers were not asked to make payments, and interest rates remained at 0%.
Announcing the latest extension in April, Biden said the country was “still recovering from the pandemic and the unprecedented economic disruption it caused.” He said Federal Reserve data indicated many Americans would face significant hardship and financial instability if payments resumed on schedule.
Will Biden forgive student loans?
Separately from the pause, questions remain on whether Biden will pursue widespread student debt cancellation.
Biden previously said he supports canceling up to $10,000, but he argued it should be done through congressional action. Negotiations have stretched on for months, with some Democrats calling on the president to do more and Republicans opposing mass debt cancellation efforts.
The White House has said Biden will make a decision on student loan forgiveness by the end of August, after the president initially said in April he’d announce a decision within a “couple of weeks.”
So far, the Biden administration has taken a more targeted approach to debt cancellation, focusing largely on students who were ‘misled’ by for-profit colleges.
The Associated Press and Megan Divers contributed.