On Friday, the Biden administration extended the federal student loan payment moratorium until January 31, 2022, which originally had been slated to expire on September 30, 2021. The Department of Education has indicated that this pandemic reprieve will be the last extension of its kind.
Secretary of Education, Miguel Cardona said, “The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency…As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment” reports Politico. For those eligible borrowers, this means payments will resume in February of 2022.
When the COVID-19 pandemic struck, student loan borrowers, which numbers in the millions, have been able to avoid federal student loan payments, which “also included a 0% interest rate on loans, and the government had directed loan servicers to pause collection attempts.” This was enacted first via “the CARES Act, then due to extensions from former President Donald Trump, former Sec. of Education Betsy DeVos and President Biden.”
The Washington Post indicated that “[t]he Biden administration was under pressure to extend the forbearance for federally held student loans, especially in light of the recent extension of the eviction moratorium for renters.” According to a Pew Charitable Trusts survey, “highlight[ing] borrowers’ awareness of the pause and its eventual end, plus any steps they might have taken to help ease the resumption of payments…two-thirds (67%) of borrowers…said it would be difficult for them to afford payments if they resumed the following month.”
Many Americans are still holding out hope that the federal government will forgive student loans, which have peaked to record amounts in the last year. During his initial months in office, President Biden said “that he would ask Congress to forgive $10,000 per person in debt.” The Democratic Party is divided on what policy would be best, but many progressives want to see more than what President Biden has offered.
In a statement issued on Friday after the announcement, Senate Majority Leader Chuck Schumer (D-NY), and Senator Elizabeth Warren (D-MA), and U.S. Representative Ayanna Pressley (D-MA) said “While this temporary relief is welcome, it doesn’t go far enough…We continue to call on the administration to use its existing executive authority to cancel $50,000 of student debt…Student debt cancellation is one of the most significant actions that President Biden can take right now to build a more just economy and address racial inequity.”
