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With the pause on federal student loan payments set to expire at the end of the month and no announcement yet from President Joe Biden about whether he will issue another extension, borrowers and lenders are growing increasingly frustrated over the lack of clear policy direction, NBCNews.com reported. Although most debt forgiveness advocates, policy experts and loan servicers don’t expect Biden to restart federal loan payments so close to the midterm elections, the White House’s drawn-out decision-making process has led to uncertainty for both borrowers trying to plan their finances and servicers who are unsure whether they need to start notifying loan holders about coming payments. “Education Secretary [Miguel] Cardona said he would give borrowers ample notice — we are now just three weeks away from a financial cliff,” said Natalia Abrams, the president and founder of the Student Debt Crisis Center. Biden has extended the federal student loan moratorium, which began under former President Donald Trump, four times. The White House hasn't said whether he will continue to extend it. The White House didn’t reply to a request for comment. Debt forgiveness advocates say that inflation is already putting a financial strain on many borrowers and that Biden’s delayed announcement is unnecessarily contributing to peoples’ financial anxiety. Adding to the uncertainty is the lack of clarity about whether and when he will cancel some student loans. “It is really confusing for borrowers and servicers to navigate,” said Kyra Taylor, an attorney at the National Consumer Law Center. “There’s this question of ‘when will I have to make payments again?’ And then there’s a secondary question of ‘how much am I going to have to repay with cancellation looming?’”

The pandemic-era freeze on student debt payments has “dramatically” improved credit scores for Americans who borrowed money to pay for college, the Federal Reserve Bank of New York said, Bloomberg News reported. About 30 million people saw improvements in their risk profile, with the biggest gains going to borrowers who were delinquent before the pandemic, New York Fed economists said in a blog post on Tuesday. They were summarizing the findings of an annual report on US student debt, which exceeds $1.7 trillion in total. The moratorium on repayments and interest charges for federal student loans has been in place since the pandemic began in early 2020. It’s currently set to expire on Aug. 31, though President Joe Biden’s administration is weighing another extension, as well as a partial debt forgiveness for some borrowers. The share of student-loan balances held by subprime borrowers fell to 26% in 2021, from 36% in 2019. That’s primarily because loans owed to the federal government that were delinquent before the pandemic were marked as current under the forbearance policy, putting millions of households on a sounder financial footing. “The end of forbearance will have impacts on credit scores, borrowing, and household cash flow over the coming year for the 38 million federal borrowers that have benefited from the pause,” the New York Fed researchers wrote. “Some borrowers will enter delinquency or default.”

Credit-score provider VantageScore Solutions LLC said it would stop factoring all medical debts that are in collections into the latest versions of its scores, the Wall Street Journal reported. VantageScore’s decision goes beyond a recent move by Equifax Inc., Experian PLC and TransUnion to remove many medical collections from people’s credit reports. The three companies own VantageScore, which competes against Fair Isaac Corp., the creator of the more widely used FICO credit scores. Hospitals and other medical providers send unpaid bills to collection companies, which then report the accounts to the credit-reporting firms. The information often lowers people’s credit scores, which makes it harder to get approved for credit or to get loans on affordable terms. VantageScore expects the change to take place in October. Millions of people with medical debts in collections could see a score increase of as much as 20 points, the company said.

Americans are starting to see an end for the relentless rise in US home prices. Consumers surveyed last month said they expect home prices to rise by about 3.5% in the coming year, down from an expected change of 4.4% a month earlier and 6% at the start of 2022, data from the New York Federal Reserve showed yesterday, Bloomberg News reported. The drop was reflected across education and income groups, marking the third-straight decline and the lowest expected growth rate since November 2020. Home prices have surged over the last couple of years, fueled through much of that time by ultra-low mortgage rates and a pandemic-fueled rush for more spacious properties. While price increases remain extremely high, recent data have shown a slight deceleration as higher borrowing costs deter prospective buyers and inventory picks up. The average on a 30-year loan is hovering just under 5%, Freddie Mac data show, up from roughly 3% at the end of last year.

A legal advocacy group for students filed a federal petition urging the agency that oversees the National Health Service Corps to change its rules to address the penalties facing healthcare workers who involuntarily violate contracts they signed to ease their student debt, the Wall Street Journal reported. The National Student Legal Defense Network, a nonprofit founded by former Education Department officials focused on addressing problems in the higher-education system, filed a 71-page petition on Monday, part of a formal process that allows individuals or entities to push a federal agency to change its rules. The group has previously been successful in some efforts to change federal rules on behalf of student borrowers. The network turned its sights on the Service Corps after a Wall Street Journal investigation in February found that job disruptions caused by the pandemic have put more clinicians — who through the Service Corps pledge to work in places with too few medical providers in exchange for help repaying their student loans — in violation of their contracts. That leaves many of them facing penalties many times the amount of aid they received. Among the changes the petition seeks is a rule that would automatically waive the penalties for healthcare workers who were terminated by their clinics through no fault of their own — for example, due to pandemic-related cuts — and who were unable to find a similar replacement within an hour of their home. The program’s penalties are written in law, meaning only Congress can change them. But agencies have leeway in developing regulations on how to implement the law, a process known as rule-making. In the case of the 1987 bill that created the loan repayment program, Congress granted the health secretary authority over how to determine whether someone is eligible for a waiver, which would permanently excuse a participant from their obligations.