The Biden administration has decided to extend the pause on federal student loan payments to January 31, 2022.
The student loan moratorium, which has suspended payments, interest, and collections on most federal student loans since March 2020, had been set to expire on September 30, 2021 after several extensions. Advocates for student loan borrowers and lawmakers in Congress had been increasingly concerned about the ability of borrowers to resume payments, and the capacity of loan servicers to handle the transition, in light of the uneven economic recovery and turmoil caused by the recent abrupt departure of two major student loan servicers.
The administration characterized the decision as the “final” extension of student loan relief, meaning that student loan borrowers should plan on their payments resuming by February of 2022.
“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,” said Education Secretary Miguel Cardona in a statement on Friday. “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.”
While advocates for student loan borrowers praised the decision, they called on the Biden administration to use the next few months to provide more widespread relief to borrowers, including broad student loan cancellation. “While today’s announcement provides some financial security for borrowers and their families as they recover from job losses, reduced hours, or shut down businesses, the reality is that the President can do much more,” said Natalia Abrams, executive director of Student Debt Crisis in a statement. “President Biden has the legal authority to cancel student debt through executive action and we are building an unprecedented movement urging him to take such action before payments resume on January 31, 2022.”
“Today’s announcement is welcome news for tens of millions of student loan borrowers; but now the work on their behalf starts in earnest,” said Student Borrower Protection Center Executive Director Seth Frotman in a statement.
“Welcome news that the [Department of Education and President Biden] will extend the student loan payment pause until Jan. 31st, 2022,” Tweeted Rep. Ayanna Pressley (D-MA), one of the most vocal advocates of broad student loan relief for borrowers, including widespread student loan forgiveness. “Thousands of families will sleep easier tonight. Now let’s #CancelStudentDebt outright, Mr. President.”
A full executive order or memorandum has yet to be released by the administration, but all previous extensions of the student loan moratorium provided that the months of suspended payments would count towards student loan forgiveness programs, including the Public Service Loan Forgiveness program, as required under the CARES Act. The Department of Education promised to release more information to borrowers in the coming days.
Further Reading
Student Loan Cancellation Debate Continues Amidst Servicer Disruption
Huge Student Loan Servicing Shakeup: This Major Loan Servicer Is Ending Its Contract
Did The Biden Administration Just Send A Big Signal On Student Loan Cancellation
$125 Million In Student Debt Forgiveness Announced For 50,000 Students, Using Biden Stimulus Funds
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Biden Administration Will Extend Student Loan Pause To 2022, While Advocates Urge Cancellation - Forbes
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