"The clock is ticking for the Biden administration to let borrowers know whether it plans to extend the pause on federal student loan payments, which is currently set to expire on Aug. 31. If the pause is not extended, 45 million borrowers will have to begin making payments on their federal student loans after a break of over two years," Inside Higher Ed reports.
..."Colleges are worried about the high probability for default once repayment begins. If too many borrowers default on their loans in a certain frame of time, it can have negative consequences for colleges, because their eligibility for federal student aid is determined, in part, based on the ability of graduating students to repay their loans.
'There are a number of schools who are very concerned about onboarding this many borrowers, really, because one of the accountability metrics that is in place is how many students default on their loans within three years of [entering] repayment,' said Justin Draeger, president of the National Association of Student Financial Aid Administrators."
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Publication Date: 7/22/2022