The three-year pause on federal student loan payments is coming to an end, as interest will start accruing again on September 1. The Biden administration has implemented a yearlong grace period to ease the transition, during which late or missed payments will not be reported to credit agencies. The administration is still pursuing debt cancellation through the Higher Education Act, but it remains uncertain who will qualify and when. Additionally, a new income-driven repayment plan called SAVE has been introduced, which aims to lower monthly payments and shorten the repayment period. The plan also clears interest if borrowers can pay the monthly bill on the principal loan amount.
Some college graduates are suggesting a boycott on repaying student loans once the current federal loan payment pause ends in the summer. The Senate backed a House resolution that would cancel Biden's student loan forgiveness plan, which he pledged to veto. The debt ceiling deal agreed between President Biden and Speaker Kevin McCarthy says the pause will "cease to be effective" from 60 days after June 30. The pause was initially introduced as a temporary measure during the coronavirus pandemic and has been extended eight times.
The pause on federal student loan payments, which has been in effect since March 2020 due to the pandemic, will end on January 31, 2022, according to Education Secretary Miguel Cardona. The Biden administration has faced pressure from Democrats to cancel student debt, but Justice Gorsuch has questioned the "fairness" of such a plan.
