SPRINGFIELD, Mass. (WWLP) – The House of Representatives voted this past Wednesday to raise the debt ceiling in order to avoid a default. And in that agreement comes with a condition that the student loan payment pause ends after August 30.
22News spoke with AIC Economics Professor John Rogers about why the Government is most likely making this decision in the wake of the COVID-19 pandemic.
“All of these people will have outstanding loans and they haven’t had to pay them for three years and now we want them to start paying them back so it’s as simple as that,” John Rogers, Professor of Economics and Finance at AIC, explained. “It’s ‘hey we’re back in business’ everybody has the opportunity to get a job… they should start repaying these loans.”
And in the meantime, millions of borrowers are still waiting to hear if the Supreme Court will approve Biden’s plan to forgive some of their student loans.
“That’s sitting in front of the Supreme Court right now,” says Professor Rogers. “Once the Supreme Court gives its opinion, the feeling is it would probably have to go back to Congress.”
Rogers added, “Congress would have to vote to forgive those student loans and now that the Republicans control the House of Representatives it’s unlikely that that would pass.”
President Biden’s partial forgiveness plan would cancel $10,000 of debt for those who make less than $125,000 a year and $20,000 for people who received Pell grants for low-income families.
The Federal Student Aid website says borrowers should receive a billing statement at least 21 days before their first payment is due, but to check with loan providers in the meantime for a payment estimate and due date.