Federal student loan moratorium set to end this fall

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SPRINGFIELD, MA (WGGB/WSHM) — Federal student loan payments have been on hold since the start of the COVID-19 pandemic, but that may soon change as the moratorium is expected to be lifted this fall.

“I actually haven’t paid off a student loan yet, but I’m about $12,000 in debt,” Chicopee’s Mason Stepno said.

It’s a reality many people may face this fall as they begin to pay off their federal student loans. For Stepno, he only has $2,000 left to repay.

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

O’Connor believes President Joe Biden will not make a final decision until the midterm elections due to rising inflation rates.

“Especially given the inflation in the country and the upcoming midterm elections, politically, I think it makes sense for them to delay student loan repayments,” O’Connor noted.

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

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

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

“I strongly believe that ultimately people will repay their loans. I don’t think the loan forgiveness will really take effect,” O’Connor said.

Federal student loan forbearance ends August 31. President Biden has until then what his next steps are before you eventually have to pay off your student loans.

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