Student loan repayment to resume in October

The Department of Education says the three-year, pandemic-induced pause on student loan repayments will end in October.

Borrowers got a break on repayment during the early days of the COVID-19 crisis under President Donald Trump, and the Biden administration renewed the moratorium.

But a spending deal struck by Mr. Biden and House Speaker Kevin McCarthy says interest charges and payments must resume.

“Student loan interest will resume starting on September 1, 2023, and payments will be due starting in October,” the department told Politico, which first reported the resumption date.

The department said borrowers would be notified before payments restart.

Mr. Biden’s decision to let the payments resume angered some student advocates.

NAACP President and CEO Derrick Johnson and Wisdom Cole, national director for the NAACP Youth and College Division, told Mr. Biden in a letter Wednesday that Black Americans are more likely to default on loans and “bear the weight of the debt ceiling compromise.”

“The resolution of the debt ceiling crisis is one we wholeheartedly welcomed, and we appreciate all that went into debt ceiling negotiations. However, we are disappointed that the needs of Black communities have suffered from the negotiated agreement that will erode economic progress for Black Americans,” the leaders wrote.

There is a bigger fight looming over Mr. Biden’s plan to forgive up to $10,000 in federal student debt per borrower and up to $20,000 for Pell Grant recipients.

The Supreme Court is set to rule on the legality of the forgiveness program in the coming weeks.

Mr. Biden has defended his forgiveness plan as much-needed relief for students weighed down by a broken system of rising tuition rates.

Opponents say the plan essentially requires Americans who repaid their loans or bypassed college to subsidize highly educated persons who can earn high incomes.

The NAACP leaders said they expect Mr. Biden to reach for a remedy if the high court rules against his forgiveness plan.

“Should the Supreme Court fail to uphold student debt relief, Black America demands that your administration pursue all legal pathways to make a permanent solution that respects the contributions of student loan borrowers, makes higher education more accessible and affordable and ends the cycle of pushing Black borrowers into poverty as they seek to share in the opportunities afforded by this nation,” they wrote.

For more information, visit The Washington Times COVID-19 resource page.