What borrowers should do with extended student loan pause

University graduates, Class of 2022
University graduates Class of 2022 Photo credit Getty

BUFFALO, N.Y. (WBEN) "This is the 8th time that they have kicked this can down the road." Jeff Boron of Send Your Kids to College has been following developments with President Biden's student loan forgiveness program.

He told WBEN Wednesday that extending the pause was inevitable and
thinks it is very likely it will continue beyond June.

"There is a lot of turmoil out there," said Boron. "This is headed to the Supreme Court and loan payments were set to resume January 1st. That would have caused chaos while this was in limbo. The president had the authority to extend the pause on loan payments until the end of his term."

The White House has already send out notifications to about 16 million people that their loan forgiveness has been approved, pending the court's decision. President Biden on Tuesday said he is "completely confident that his student debt relief plan is legal."

Boron called it a sticky case. "They're relying on the Hero's Act. The question is whether the authority falls under the hero's act in a so-called national emergency." Biden is using the Covid pandemic as the national emergency.

"It comes down to this," added Boron. "The administration knew the program would not be approved if it went through normal measures, (through Congress). Biden pushed it through on an executive order. The Supreme Court has to decide if the president has the authority to do this with executive order and also determine if it sets a precedent, in getting around congress for this type of spending."

In the meantime, Boron has advice for student loan borrowers. "If you owe more than 10-thousand dollars this is a great opportunity to pay down principal on your loan. That amount is not going to be forgiven. If you have the means and you're working, this is a great time to whittle away at the principal."

Boron believes we're in for a long fight on this. "The court and legal system moves very, very slowly," he said.

Featured Image Photo Credit: Getty