The bill’s text specifies that the payment pause “shall cease to be effective” 60 days after June 30.
“I’d like to think that it could be driven by people reacting to changed lives since the pandemic started,” Dinerstein says of the increase in credit card debt and late payments.about how they’ll make payments, particularly since they’d anticipated partial or full debt relief under Biden’s plan to clear up to $20,000 in debt per borrower. Dinerstein mentions that it may not impact people whose earnings have risen since the pandemic.
Loan forgiveness, deferment and forbearance are also options for some people experiencing financial hardship. Borrowers can also consider consolidating their loans, which could help them by extending the repayment period.Debt relief proponents have advocated for the continuation of the pause until Biden delivers on his promise to cancel thousands in loans for borrowers. Awill dictate whether Biden’s plan, which has been blocked since last year, is constitutional or not.
How the end to the payment pause will affect non-borrowers and the general U.S. economy remains uncertain. Millions of Americans may have less disposable income if their loan payments resume, which could theoretically ripple into the economy and limit recreational purchases. On the upside, that could help reduce price inflation, Dinerstein points out.
“Student loans are a large source of debt,” he says. “It’s large enough that they could start to have an aggregated impact, but I think it’s a bit of a wait-and-see.”
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