President Joe Biden announced Wednesday that he is putting a hold on student loan payments until May 1.
The payments, which were set to resume on February 1, have been halted since the start of the pandemic. Biden cited the ongoing Kovid-19 crisis in the country as the reason for the expansion.
Biden said in a statement, “Given these considerations, today my administration is suspending federal student loan repayments for an additional 90 days — until May 1, 2022 — as we manage the ongoing pandemic and improve our economic conditions.” further strengthen the reform.” “In the meantime, the Department of Education will continue to work with borrowers to ensure they have the support they need to make the transition smoothly to repayment and advance economic stability for their homes and our country.”
The reversal came less than two weeks after White House press secretary Jen Psaki indicated the administration was still planning to restart federal student loan payments in February, resisting pressure from some fellow Democrats. , who are calling for the expansion of coronavirus pandemic relief benefits.
The potential expansion was first reported by Politico.
With no payments required on most federal student loans since March 2020, the borrower’s balance is effectively frozen for almost two years. During this time, interest has stopped adding up and collections on the defaulted loan are stopped.
Both Biden and former President Donald Trump took action to extend the pause. Most recently, Biden moved the payment restart date from September 30, 2021 to January 31, 2022, but the administration clarified at the time that this would be the final extension.
Some Democrats pressure Biden to offer relief
Senate Majority Leader Chuck Schumer of New York, Sen. Elizabeth Warren and Rep. Ayanna Pressley, both of Massachusetts, has been pressuring Biden to extend the student loan repayment break and has praised the extension announcement.
“Extending the pause will help millions of Americans, especially as we overcome the Omicron version,” Schumer, Warren and Pressley said in a statement.
But he continued to urge Biden to take further action and cancel student loan debt of up to $50,000 per borrower.
Biden said during the presidential campaign that he would support the cancellation of $10,000 per borrower, but has not taken action to do so beyond instructing federal agencies whether they have the authority.
Asked about that campaign pledge earlier this month, Psaki said executive authority regarding student loan forgiveness is still under review and said the president supports Congress’s action on the matter.
“If Congress sends them a bill, they are happy to sign it. They have not sent them any bills on that yet,” she said.
Biden has repeatedly resisted pressure to cancel up to $50,000 per borrower since taking office – making it clear during a CNN town hall earlier in the year that he does not support the idea.
Separately, since taking office, Biden’s education department has made it easier for those who were duped by for-profit colleges to get debt relief. It has also temporarily expanded the Public Service Loan Forgiveness program that cancels outstanding loans for eligible public service workers after they have paid for 10 years.
Preparing to resume payment
“As we prepare for a return of repayment in May, we will continue to provide borrowers with tools and support to help them enter a repayment plan that is responsive to their financial situation, such as an income-driven repayment plan,” said Education. Said Secretary Miguel Cardona in a statement on Wednesday.
Most borrowers with federal student loans have not had to make any payments since March 2020. Direct loans as well as PLUS loans, which are available to graduate school students and parents on behalf of their children, are eligible for benefits. Some federal loans that are guaranteed by the government but not technically held by it, known as federal family education loans, or FFELs, did not qualify. Generally, they were distributed before 2010.
The relief is even more significant for those who work in the public sector and may be eligible for federal student loan forgiveness after 10 years. They are still receiving credit for those 10 years of required payments just as they continued to do them during the pandemic, as long as they are still working full-time for qualified employers.
According to the Department of Education, borrowers will receive a billing statement or other notice at least 21 days before their payment is due. People who set up auto payments may need to notify their loan service company that they want to continue.
If federal student loan borrowers can no longer make their monthly payments, they may be eligible for an income-driven repayment plan. Under those plans, which are based on income and family size, monthly payments can be as low as $0 per month. The Department of Education has more information online about payment resumes.