White House Extends Student Loan Repayment Freeze
WASHINGTON — The Biden administration on Wednesday extended a freeze on student loan repayments to May 1. Borrowers’ payments were to resume in February.
The so-called administrative forbearance was initially put in place as part of the CARES Act in March 2020 and was later extended by then-President Donald Trump.
On his first day in office in January, President Joe Biden pushed the effective date for resuming student loan payments back to Sept. 30, and then in August, he pushed it back again to Jan. 31, 2022.
The pause, the president said in a statement, “has given 41 million Americans badly-needed breathing room during the economic upheaval caused by the global COVID-19 pandemic.”
“Now, while our jobs recovery is one of the strongest ever — with nearly 6 million jobs added this year, the fewest Americans filing for unemployment in more than 50 years, and overall unemployment at 4.2% — we know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,” Biden said.
As a result of the moratorium, about 41 million borrowers have been spared interest accruals and nearly 27 million borrowers haven’t had to pay their monthly bills at all since the forbearance began.
Another 7.2 million borrowers whose loans are in default have gotten a reprieve from collections.
The president said between now and the expiration of the forbearance in May, the Education Department “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.”
Biden went on to ask all student borrowers to do their part as well.
“Take full advantage of the Department of Education’s resources to help you prepare for payments to resume,” he said. “Look at options to lower your payments through income-based repayment plans; explore public service loan forgiveness; and make sure you are vaccinated and boosted when eligible.”