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Student loan borrowers will have a reprieve from monthly bills for an extra 90 days, the Biden administration announced Wednesday.
The pause on federal student loan payments, interest and collections will now end on May 1, 2022. Previously, the freeze was scheduled to end on January 31, 2022. The decision to extend the pause comes after weeks of pressure from advocates, activists and Democratic lawmakers, including Senate Majority Leader Chuck Schumer, who warned that borrowers weren’t financially ready for payments to resume.
Despite this pressure, up until this week, the Biden administration was maintaining that the payment freeze would end on January 31. In meetings with student debt advocates, administration officials said the economy was moving in the right direction and it was time for payments to resume, Politico reported last week.
In his statement announcing the extension of the pause, President Joe Biden acknowledged the financial challenges borrowers could face if they’d be forced to resume payments on February 1. “We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments.” Still, Biden emphasized the decent state of the economy, calling the jobs recovery “one of the strongest ever.”
Has the student loan payment pause impacted your life? We want to hear from you. Email jberman@marketwatch.com.
The decision to extend the payment pause also comes amid a surge in new COVID cases due to the Omicron variant and concerns about how inflation might impact borrowers’ finances. Secretary of Education Miguel Cardona said in a statement that the decision to extend the freeze will “allow our Administration to assess the impacts of Omicron on student borrowers.”
Cardona added that the U.S. Department of Education would continue to provide tools and support for borrowers to ensure they entered repayment with an affordable monthly bill. The Department and the servicers it hires to manage the student loan program were already communicating with borrowers about the return to repayment.
In his statement, Biden encouraged borrowers to take advantage of these resources in the coming months. “I’m asking all student loan borrowers to do their part as well,” he said.
Many of those pushing for the extension of the pause applauded Biden’s announcement. Senator Elizabeth Warren and Representative Ayanna Pressley, both Massachusetts Democrats, issued a joint statement with Schumer, saying they were “pleased the Biden administration has heeded our call to extend the pause on student loan payments.”
Still, the lawmakers and advocates renewed their calls for the Biden administration to do some kind of mass student debt cancellation. During his campaign for president Biden proposed cancelling $10,000 in student debt per person. But so far, his administration hasn’t said whether they’d do it without legislation from Congress.
Since Biden took office, the Department of Education has discharged nearly $13 billion in student loans for public servants, borrowers who were scammed by their schools, borrowers with severe disabilities, and others who had been waiting on promised relief from government programs.
