Biden Admin Extends Student Loan Repayment Pause Thru January 2022

What’s the story?

• The Biden administration announced Friday that it is extending the pause on federally-held student loan payments through January 31, 2022, for the final time. The pause initially began in the spring of 2020 pursuant to the bipartisan CARES Act, was extended on two occasions by the Trump administration, and President Joe Biden extended through September 2021 shortly after taking office. 
• While pause is in effect, the federally-held student loans do not accrue interest, payments aren’t required (although borrowers may continue to make payments against their principal balance), and collections of defaulted student loans are also paused. Borrowers with federally-held student loans do not need to request the pause from their servicer, as it takes effect automatically, although they can contact their loan servicer with questions.
• In a statement, Biden called the pause “a critical lifeline” that enables borrowers to not “have to choose between paying for basic necessities or their student loan during the pandemic that upended their lives” and added: 

“That’s why today, my administration is extending the pause of federal student loan repayments one final time until January 31, 2022. This will give the Department of Education and borrowers more time and more certainty as they prepare to restart student loan repayments.”

• Senate Majority Leader Chuck Schumer (D-NY) was joined by Sen. Elizabeth Warren (D-MA) and Rep. Ayanna Pressley (D-MA) in releasing a statement saying they’re “pleased” with the extension but it that “it doesn’t go far enough” and calling for Biden to cancel $50,000 of student loan debt for individual borrowers:

“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.”

• House Education and Labor Committee Ranking Member Virginia Foxx (R-NC) released a statement criticizing the Biden administration’s latest extension as “needless” and added:

“This extension does a grave disservice to borrowers across the country, and our children will pay the ultimate price for this irresponsible delay. Secretary Cardona is using the permanent pandemic narrative to wield power rather than enact responsible solutions to help borrowers get back on track. I regret that Secretary Cardona did not show real leadership by working with Congress to transition responsibly the portfolio back into repayment by Oct 1 of this year. It is nothing less than a dereliction of duty.”

— Eric Revell

(Photo Credit: iStock.com / Kameleon007)