At this point, the federal student loan moratorium has been going on for more than two years, and it's not yet clear what the Biden administration is planning to do about it.
Between reports of potential student loan forgiveness and questions about the possibility of extending the moratorium further into 2022, the fact remains that over 44 million student loan borrowers are currently without a clear direction as to what's supposed to happen next.
Below, Select details what you need to know about the upcoming Aug. 31 deadline and how the next few weeks could be pivotal if you still have student loans to pay off.
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The student loan moratorium deadline is approaching
At the onset of the Covid-19 pandemic, the Department of Education froze all federal student loan payments and interest from accruing, offering millions of American students relief during such difficult times.
Fast-forward to where we are today, with record-high inflation burdening the wallets of so many and some members of Congress calling for mass student loan forgiveness or even complete cancellation to aid in the economic recovery.
American voters seem to be split on the matter, with a recent YouGov survey indicating that 51% of respondents either strongly or somewhat support $10,000 in student loan forgiveness, while another 38% strongly or somewhat oppose it.
Moving forward, the Biden administration is well aware of the implications student loan forgiveness would carry, as it's likely to have an impact on the upcoming election cycle. Because of that, it's likely there will be some sort of decision made before the Aug. 31 deadline.
With that in mind, here are three things to consider if you currently have federal student loans.
1. Hopes of student loan forgiveness are waning
There appears to be a large political divide when it comes to student loan forgiveness and whether it should or shouldn't happen. That said, the real issue lies within the limits of presidential powers.
In a Feb. 2021 town hall, President Joe Biden admitted to being unsure if he could sign away student debt, even though one of his campaign promises was to eliminate federal student loans for qualifying Americans. House Speaker Nancy Pelosi affirmed that sentiment last year by stating he doesn't actually have that ability. If Congress is needed to make the call, the Republicans so far has remained adamant about blocking any student loan forgiveness plans brought forth by the Democrats.
Without any distinctive action taken yet nearly 18 months into the Biden presidency, student borrowers are left wondering if loan forgiveness will ever come to fruition — if any executive action is taken, it will likely be met with court challenges as well.
2. If you're eligible for Public Service Loan Forgiveness, apply before Oct. 31
Public Service Loan Forgiveness, or PSLF, was designed to help those who went on to work in federal, state, local, tribal government or military roles, as well as for the Peace Corps, AmeriCorps, and certain not-for-profit organizations, by forgiving their student loans after 10 years of service.
The program, unfortunately, has been fraught with issues, including up to 98% of applicants being rejected, though it's something the U.S. Department of Education is working on improving. The Biden administration is also attempting to overhaul the program and clear more borrowers of their debts, with new measures such as the Limited PSLF Waiver Opportunity.
In past years, applicants had to have a qualifying loan product and make payments for 120 consecutive months in order to qualify for student loan forgiveness through PSLF. Now until Oct. 31, you can apply and possibly receive credit for past periods of repayment on loans that would otherwise not qualify for PSLF — past repayments will now also count toward the 10-year mark needed to qualify. For more details, visit the official Federal Student Aid website.
3. Interest rates are rising, so consider refinancing
The Federal Reserve has been attempting to tackle recent record-high inflation by consistently raising interest rates. However, the existence of higher interest rates also means loan products including mortgage, student loans, credit cards and auto loans are becoming more expensive as a result.
While interest rates for federal student loans are effectively down to zero during the moratorium, they will return to normal once payments resume after Aug. 31.
According to the Education Data Initiative, the average student loan interest rate is 5.8% — thankfully, there are plenty of student loan refinancing options offering interest rates lower than that. Before you consider refinancing your student loans, keep in mind that by doing so, you'll lose federal protections and miss out on any chance of forgiveness or assistance from any federal agency. Consider refinancing private student loans you may have now, and wait until there's a decision made on the federal student loan moratorium before you evaluate refinancing your federal loans.
If you're still not eligible for any student loan forgiveness programs, refinancing your student loans (especially if they are private loans) may make sense — I actually originated my student loans from a private bank and strategically refinanced six times to a mere 2.25% interest rate with a personal line of credit. By lowering your interest rate, you can prevent your loan balance from skyrocketing out of control.
Here are a few of our favorite student loan refinance providers to consider:
- 0.25% autopay interest rate discount
- 0.125% SoFi Plus discount
- No origination fees, no late fees and no insufficient fund fees
- Private loans, which means you lose federal loan benefits
- $5,000 minimum loan amount
Fixed rates range from 4.49% APR to 10.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Variable rates range from 5.74% APR to 10.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 9/23/26 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. You may pay more interest over the life of the loan if you refinance with an extended term.
Autopay Discount: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly payments as outlined in your loan agreement by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. When the autopay interest rate deduction is added or removed, the next time the loan is re-amortized (quarterly for fixed rate loans; monthly for variable rate loans),the principal balance of your loan will be spread over the remaining loan term, and your monthly payment amount will change. This benefit is suspended during periods of deferment, grace period, or forbearance. Autopay is not required to receive a loan from SoFi.
Once you become eligible during the initial period, the discount will be removed or reinstated depending on whether the criteria have been met. Each time your loan is re-amortized, your monthly payment amount will change based upon the interest rate that was in place. SoFi reserves the right to modify or terminate this offer at any time for unenrolled participants. You are not required to meet these criteria to be approved for a loan.
Actual rate and available repayment terms will vary based on your financial profile. Our lowest rates are only available for the most credit qualified existing cosigned loan borrowers who receive the 0.25% Loyalty discount and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our 0.25% Auto Pay discount. Enrolling in Auto Pay is not required as a condition for approval. Interest rates are subject to change.
Residents of Hawaii must request a loan of at least $1,501.
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option.
To be eligible for the Loyalty Discount, applicants must have previously obtained an Earnest Private Student Loan and apply using the same email address associated with that loan. Only one Loyalty Discount may be applied per eligible Earnest Private Student Loan. Not all applicants may qualify. This offer cannot be combined with Earnest's Rate Match program. Earnest may modify or discontinue this offer at any time and without notice, however, once a Loyalty Discount is earned, it will not be taken away.
Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
Earnest clients may skip a payment through a single, one-month forbearance during a 12 month period. Your first request to skip a pay can be made once you've made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Any unpaid accrued interest may capitalize (added to the principal balance) at the end of the forbearance period by adding unpaid accrued interest to the outstanding principal as permitted by law and the terms of the loan agreement. Please note that skipping a payment is not guaranteed and is at Earnest's discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
Bottom line
The future of student loan repayment is unclear, and unfortunately borrowers aren't being given much information to go on.
Select reached out to the Department of Education, which responded with the following statement: "The Department of Education will continue to assess the impacts of the Covid-19 pandemic and the economy on student loan borrowers. We will communicate directly with borrowers about the end of the payment pause when a decision is made."
If you're currently holding federal student loans, the best course of action is to assume your payments will resume — that way, if they do, you will be ready. If the government does decide to continue the moratorium or move forward with some sort of loan forgiveness plan, you'll at least be as financially prepared as possible for that scenario as well.
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*Fixed rates range from 4.49% APR to 10.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Variable rates range from 5.74% APR to 10.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 9/23/26 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. You may pay more interest over the life of the loan if you refinance with an extended term.
Autopay Discount: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly payments as outlined in your loan agreement by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. When the autopay interest rate deduction is added or removed, the next time the loan is re-amortized (quarterly for fixed rate loans; monthly for variable rate loans),the principal balance of your loan will be spread over the remaining loan term, and your monthly payment amount will change. This benefit is suspended during periods of deferment, grace period, or forbearance. Autopay is not required to receive a loan from SoFi.
Once you become eligible during the initial period, the discount will be removed or reinstated depending on whether the criteria have been met. Each time your loan is re-amortized, your monthly payment amount will change based upon the interest rate that was in place. SoFi reserves the right to modify or terminate this offer at any time for unenrolled participants. You are not required to meet these criteria to be approved for a loan.
