December 23, 2021
President Joe Biden announced on Wednesday, December 22, that he is extending the pause on student loan payments until May 1, reports CNN.
The payments—which had been set to restart on February 1—have been paused since the beginning of the pandemic. Biden pointed to the ongoing COVID-19 crisis in the country as the reason for the extension.
“Given these considerations, today my Administration is extending the pause on federal student loan repayments for an additional 90 days—through May 1, 2022 —as we manage the ongoing pandemic and further strengthen our economic recovery,” Biden said in a statement, adding, “Meanwhile, the Department of Education will continue working with borrowers to ensure they have the support they need to transition smoothly back into repayment and advance economic stability for their own households and for our nation.”
The reversal comes less than two weeks after White House Press Secretary Jen Psaki had indicated that the Administration still was planning to restart federal student loan payments in February—resisting pressure from some fellow Democrats who have been calling for an extension of coronavirus pandemic relief benefits.
The possible extension was first reported by Politico.
Borrower balances have effectively been frozen for nearly two years, with no payments required on most federal student loans since March 2020. During this time, interest has stopped adding up and collections on defaulted debt have been on hold.
Both Biden and former President Donald Trump took actions to extend the pause. Most recently, Biden moved the payment restart date from September 30, 2021, to January 31, 2022, but the Administration made clear at the time that this would be the final extension.
Senate Majority Leader Chuck Schumer of New York, as well as Senator Elizabeth Warren and Representative Ayanna Pressley, both of Massachusetts, have been pressuring Biden to extend the student loan repayment pause and applauded the extension announcement.
“Extending the pause will help millions of Americans make ends meet, especially as we overcome the Omicron variant,” Schumer, Warren, and Pressley said in a statement.
But they continued to urge Biden to take further action and cancel up to $50,000 of student loan debt per borrower.
Biden said during the presidential campaign that he would support canceling $10,000 per borrower—but to date, had not taken action to do so, beyond directing federal agencies to conduct reviews on whether he has the authority.
When asked earlier this month about that campaign pledge, Psaki said the executive authority regarding student loan forgiveness is still under review and added that the President supports congressional action on the matter.
“If Congress sends him a bill, he’s happy to sign it. They haven’t sent him a bill on that yet,” she said.
Biden has repeatedly resisted pressure to cancel up to $50,000 per borrower since taking office—making it very clear during a CNN town hall early in the year that he did not support the idea.
Separately, since taking office, Biden’s Department of Education has made it easier for people who were defrauded by for-profit colleges to seek debt relief. It has also temporarily expanded the Public Service Loan Forgiveness program that cancels outstanding debt for qualifying public service workers after they have made payments for ten years.
“As we prepare for the return to repayment in May, we will continue to provide tools and supports to borrowers so they can enter into the repayment plan that is responsive to their financial situation, such as an income-driven repayment plan,” said Education Secretary Miguel Cardona in a statement Wednesday.
Borrowers will receive a billing statement or other notice at least 21 days before their payment is due, according to the Department of Education. Those who had set up auto payments may need to notify their loan servicing company they want those to continue.
If federal student loan borrowers can no longer afford their monthly payments, they may be eligible for an income-driven repayment plan. Under those plans, which are based on income and family size, a monthly payment can be as low as $0 a month. The Department of Education has more information online about the payment restart.
Research contact: @CNN