Federal student loan moratorium set to end this fall

Federal student loan payments have been on pause since the start of the COVID-19 pandemic, but that could soon change as the moratorium is expected to be lifted
Updated: Aug. 2, 2022 at 5:00 PM EDT
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SPRINGFIELD, MA (WGGB/WSHM) - Federal student loan payments have been on pause since the start of the COVID-19 pandemic, but that could soon change as the moratorium is expected to be lifted this fall.

“I actually haven’t paid any student loans yet, but I am in about $12,000 in debt,” said Mason Stepno of Chicopee.

It’s a reality many people could be facing this fall as they start to pay back their federal student loans. For Stepno, he only has $2,000 left to pay off.

“Personally, I expect we’re going to hear him announce that he’s going to extend the pause again,” said Richard O’Connor, director of financial aid at American International College.

O’Connor believes President Joe Biden will not come to a final decision before the midterm elections on top of rising inflation rates.

“Especially given inflation in the country and the upcoming mid-term elections, politically, I think it makes sense for them to kind of delay repayment on student loans,” O’Connor noted.

O’Connor believes the president will try to cancel student loan debt with an executive order, but he also believes states will take legal action.

“It’s definitely kicking the can down the road, but I think he feels like if he announces I’m going to do $10,000 in loan forgiveness and then the Supreme Court or a lower court makes a decision not to, he can at least say ‘I tried to,’” O’Connor explained.

However, O’Connor thinks the inevitable will happen eventually.

“I strongly believe at the end of the day, people are going to repay their loans. I don’t think loan forgiveness will really take effect,” O’Connor said.

The forbearance for federal student loans ends on August 31. President Biden has until then on what his next steps are before you may have to potentially repay back your student loans.