President Joe Biden has announced that he is extending the pause on student loan payments until 1 May 2022.
The pause applies to student loan repayment, interest and collections, and is designed to allow the Biden administration to “assess the impacts of the Omicron variant on student borrowers, and provide additional time for borrowers to plan for the resumption of payments and reduce the risk of delinquency and defaults after restart”.
The action came after pressure from Democrats, and has been met with calls to totally eliminate student loan debt in the US.
In a statement, the president said: “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.
“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.”
Since 27 March 2020, payments on federal student loan payments have been paused, and the federal student loan interest rate has been set to 0%. This student loan moratorium was previously set to expire 31 January 2022, and payments were set to resume 1 February.
A total of 43.2 million student loan borrowers across the US hold a cumulative $1.75 trillion in student loan debt.
According to a November survey by the Student Debt Crisis Centre, almost 90% of 33,073 respondents said that they weren’t financially stable enough to resume payments.
Education Secretary Miguel Cardona said in the statement: “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.”
House and Senate Democrats have repeatedly urged the president to “broadly” forgive up to $50,000 of federal debt through an executive order.
Biden has consistently indicated that he would only support up to $10,000 of debt forgiveness, and that he would prefer Congress to craft the legislation, something that currently appears unlikely.
Next, POTUS should #CancelStudentDebt
– Senator Elizabeth Warren
Democratic senator and former presidential contender Elizabeth Warren tweeted: “Extending the student loan payment pause is a major relief for millions of Americans during this pandemic.
“I appreciate everyone who organized and pushed President Biden to take action, and I’m grateful he listened to our call.
“Next, POTUS should #CancelStudentDebt.”