Loan payment

Biden extends student loan payment suspension until August 31

  • Biden just extended the federal pause on student loan payments through August 31.
  • This follows weeks of pressure from lawyers urging Biden to extend the May 1 payment restart date.
  • Despite this additional relief, Biden has yet to provide broad student loan forgiveness.

President Joe Biden just extended the pandemic pause on student loan payments for a fourth time, until August 31.

On Wednesday, Biden announced federal student loan borrowers would get an additional four months free of monthly debt payments, just weeks before the previous student loan payment break expires on May 1. In recent weeks, lawmakers and lawyers have urged Biden to provide needed relief to borrowers, and it appears his administration has heeded those pleas.

Biden said in a statement that “as I recognized in recently extending the COVID-19 national emergency, we are still recovering from the pandemic and the unprecedented disruption it has caused. Should loan repayments resume on schedule in May, analysis of recent data from the Federal Reserve suggests that millions of student borrowers would face significant economic hardship, and that delinquencies and defaults could threaten the financial stability of the United States. United.”

The Department of Education wrote in a statement that during the extension, it “will continue to assess the financial impacts of the pandemic on student borrowers and prepare for borrowers’ smooth transition to repayment.” This includes allowing borrowers whose loans have been suspended to receive a “fresh start” by putting them back in good standing when they enter repayment, and the ministry will continue to cancel loans to borrowers defrauded by schools at profit, as well as to civil servants.

“The Department of Education is committed to ensuring student borrowers have a smooth transition to repayment,” Education Secretary Miguel Cardona said in a statement. “This additional extension will provide borrowers with greater financial security as the economy continues to improve and the country continues to recover from the COVID-19 pandemic.

The student loan payment suspension has been in place since March 2020, first put in place by former President Donald Trump to give borrowers a financial reprieve during the pandemic. And while borrowers expressed the impact the pause had on their livelihoods, keeping them and their families financially afloat, many still feared being sent back into repayment. That’s why lawmakers and advocates were constantly urging the president to extend the break again or cancel student debt.

Some lawmakers, like Senate Education Committee Chair Patty Murray, have suggested Biden use the extra payment pause time to “permanently fix” flaws in the student loan system, like programs for forgiveness of broken loan.

“It’s not too much to ask – so until we fix our student loan system, the pause in student loan payments must continue to provide borrowers with much-needed relief,” she said. declared in March.

Still, Wednesday’s extension falls short of what Murray and nearly 100 other Democratic lawmakers were calling for, which was an extension of the pause until at least 2023 and debt cancellation.

“I think some people read these extensions as good policy, but I don’t think these people understand the panic and mess that is causing people to get so close to these deadlines just to prolong the uncertainty,” said New York Rep. Alexandria Ocasio-Cortez. wrote on Twitter on Tuesday. “It doesn’t have the effect people think it has. We should cancel them.”

Republican lawmakers also weren’t too happy with another pause in payments, but for different reasons. Leading GOP lawmaker on the House Education Committee, Virginia Foxx, said in a statement Tuesday that another student loan payment freeze is “outrageous,” and she fears it will ” sets the stage for a general loan forgiveness,” which she says will cost taxpayers and the economy.

Although Biden still hasn’t commented on the prospect of a large student loan forgiveness, this fourth extension will likely amplify advocates’ argument that if he can afford to continue suspending payments, he can afford to continue to suspend payments. cancel student debt completely.

How will this additional payment suspension extension impact you? Share your student debt story with Ayelet Sheffey at [email protected]