The Trump administration initially gave Americans the option to suspend loan payments in March 2020, and Congress made it automatic soon after. The pause was extended twice by the Trump administration and twice more under Biden.
But without additional extensions, millions of Americans will be asked to begin making payments again on September 1.
A Biden administration promise on the campaign trail was "canceling student debt," but no official announcement on student loan forgiveness has been made.
Reports on the amount of debt that would be "canceled" per borrower have varied from $10,000 to $50,000. Several lawmakers have pushed for the highest amounts as recently as June, according to a report by Forbes.
Americans owe around $1.7 trillion in student loan debt, with about 92% of all education debt coming from federal loans, according to the Education Data Initiative.
The average federal student loan debt balance is $37,014, while the total average balance - including private loan debt - could be as high as $40,904.
College Board reports that 10% of borrowers with federal loans owe more than $80,000 in debt.
With the ongoing pause on payments still in effect, the director of strategic initiatives at American Financial Solutions in Seattle said people should focus on how they plan to resume payments and not bank on student loan "cancellation" or forgiveness promises from the White House.
"If they can make payments towards that [debt] right now, that's a huge opportunity to knock that debt down... while there's no interest accruing," said Becky House, of American Financial Solutions. "I'm a little worried about what's going on with, you know, the inflation and people's expenses and aid again, trying to roll in student loan payment that they haven't been making and how that's going to impact it. I think it's gonna be a bumpy ride."
This week, millions of Americans may have received a notice about their loan being transferred to a new federal student loan servicer. This is for people aiming to get education debt relief through the Public Service Loan Forgiveness program (PSLF).
On October 6, 2021, the U.S. Department of Education announced a temporary period during which borrowers may receive credit for payments that previously did not qualify for PSLF or Temporary Expanded Public Service Loan Forgiveness.
Earlier this month, the Biden administration agreed to cancel federal student debt for anyone who attended a Corinthian school from the company's founding in 1995 to its collapse two decades later. The action will erase $5.8 billion in debt for more than 560,000 borrowers, the largest single discharge in the Education Department’s history.
The settlement adds to the administration’s effort to cancel student debt for certain groups of borrowers. It has erased billions of additional dollars in debt from other former for-profit college students, along with borrowers who have severe disabilities and those with jobs in public service.
The Associated Press contributed to this report.