Social Security

Tens of millions of borrowers have their federal student loan payments on pause right now, thanks to governmental efforts to keep them out of financial trouble during the pandemic. But as soon as Oct. 1, a switch will flip and most of those people will need to start the repayment process.

Led by the Student Borrower Protection Center, 128 organizations, including the American Civil Liberties Union (ACLU) and Service Employees International Union (SEIU), sent a letter to Biden on Thursday urging him to extend the payment pause until the administration has followed through on its promises to fix the student-loan system and cancel federal student debt.

On Thursday morning, more than 125 organizations also wrote to the president to extend the pause “until your administration has delivered on the promises you made to student loan borrowers to fix the broken student loan system and cancel federal student debt.”

Millions of student loan borrowers could be at risk of having their child tax credit seized by the government. A generous expanded child tax credit was part of President Biden’s American Rescue Plan, the Covid-19 relief package that Congress enacted in the spring.

The temporary pause on loan payments and accrual of interest, first instated at the beginning of the pandemic, provided a moment of much-needed relief. The moratorium was initially set to expire in March, but President Biden extended it to the end of September on one of his first days in office. Since then, there’s been silence. Without action, billions of dollars in monthly payments will come due in September.

Using publicly available data, SBPC showed that some colleges have been encouraging students to take out “shadow debt” — which it defines as the loans and credit outside the traditional private student loan market — that is marked by high interest rates and excessive fees, according to the report.

Public colleges and universities — including Virginia Tech, the University of Connecticut and the University of Oklahoma — are encouraging students to take out high-cost, high-risk loans for non-degree-granting programs, according to findings in a new report.

Multiple student loan servicers — the companies that manage your student loan payments — allegedly made major errors during the Covid-19 pandemic, which may have directly hurt your credit score. Those are the allegations inside a shocking report, which describes wide-scale errors involving your student loans that were larger than previously known.

A report being released Friday by the SBPC accuses schools, such as Virginia Tech and Indiana University, of promoting specialty finance companies that can charge double-digit interest for loans with opaque terms.