The Biden administration extended a pause on federal student loan payments for what it described as the last time until January 31. The relief on student loan payments was due to expire on Sept. 30 and key Democratic lawmakers in Congress had been pushing for an extension. After the extension of the eviction moratorium earlier this week, several Democratic lawmakers began focusing on the impending student loans deadline as their next goal. But it didn’t take long for the White House to take action. The Department of Education issued a statement announcing the extension Friday, noting that a “definitive end date” to the relief would help borrowers better prepare and avoid late payments.
“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,” Secretary of Education Miguel Cardona said in a statement. “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.”
The moratorium on student loan payments began in March 2020, initially pausing payments through September 2020 and keeping interest rates at 0 percent. Then-President Donald Trump extended the pause on student loan payments, which benefited more than 40 million people, through January and President Joe Biden extended it once again on his first day of office. According to estimates by the Federal Reserve Bank of New York, the pause in payments has helped borrowers save $7 billion per month in payments.
Even though the pressure from Congress to extend the student loan pause had increased recently, it wasn’t new. In June, Senate Majority Leader Chuck Schumer of New York and Sen. Elizabeth Warren of Massachusetts led a group of dozens of Democrats that called on Biden to extend the pause. And many are now pushing on Biden to go further and cancel a portion of student debt. Schumer has been leading a group of Democrats to try to get Biden to cancel up to $50,000 of debt per borrower. Biden said during the campaign he’d support canceling $10,000 per borrower but has expressed opposition to forgiving debt for those who went to Ivy League schools. The White House has asked the Education and Justice Departments to analyze whether the administration has the authority to cancel that debt without approval from Congress.