Student loan companies told not to send resume payment notices: report
The Biden administration is directing companies to not send out notices about student loan payments resuming in May, signaling that the two-year freeze on payments could be extended again.
The Department of Education told companies that service federal student loans to hold off on notices to borrowers about restarting payments, CNBC reported, citing two people familiar with the matter.
When asked to confirm the directive to companies, a Department of Education spokesperson told The Hill that the agency is communicating regularly with servicers.
“The Department will continue communicating directly with borrowers about federal student loan repayment by providing clear and timely updates. The Department’s Federal Student Aid office will also continue communicating regularly with servicers about the type and cadence of servicer outreach to borrowers,” the spokesperson said.
The White House is reviewing an extension of the repayment pause, press secretary Jen Psaki told reporters last week. Her comments follow chief of staff Ron Klain’s, who said on an episode of the podcast “Pod Save America” that Biden is looking “at what we should do on student debt before the pause expires, or he’ll extend the pause.”
The payment pause, which first began through a moratorium enacted under then-President Trump in March 2020, has been extended five times. It is set to expire on May 2 after Biden extended it in January.
“That is obviously something we will continue to access and review as we get closer to May. Typically, there’s a period of time where you need to make a decision, or you at least need to convey to the loaners what they should prepare for, but I don’t have anything to predict at this point in time,” Psaki said on Friday.
Biden made no mention of student loans at the State of the Union address last week. In April, he requested a memo from the Department of Education to determine his authority to cancel student debt through executive action. Since then, the administration has not publicly announced if the memo is complete.
Biden campaigned in 2020 on forgiving at least $10,000 in federal student loans per person, and progressives have called on him to step that number up to $50,000 per borrower.