WASHINGTON—The federal government’s student loan servicing contractors have been instructed to hold off on sending billing statements ahead of an Aug. 31 deadline for ending the pandemic freeze on loan payments, giving companies little time to start loan collection processes if payments resume.
The future of the federal student loan portfolio is in limbo as President Biden considers whether to cancel a limited amount of debt for borrowers whose incomes fall under a certain threshold. The president and his advisers have been debating the issue for more than a year, frustrating activists and progressive Democrats, and putting borrowers, loan servicers and other stakeholders on edge about what happens next.