Biden extends pause on student loan repayments until May 1

Payments, which were due to resume on February 1, have been suspended since the start of the pandemic. Biden said the current Covid-19 crisis in the country was the reason for the extension.

“With these considerations in mind, my administration is today extending the break in federal student loan repayments by an additional 90 days – until May 1, 2022 – as we manage the ongoing pandemic and further strengthen our economic recovery,” he said. Biden said in a statement. “In the meantime, the Department of Education will continue to work with borrowers to ensure they have the support they need to make a smooth transition to repayment and promote economic stability for their own households and for our country.”

The reversal comes less than two weeks after White House press secretary Jen Psaki said the administration was still planning to restart federal student loan payments in February, resisting pressure from some fellow Democrats who called for an extension of relief services in the event of a coronavirus pandemic.

The possible extension was first reported by Politico.

Borrower balances have effectively been frozen for almost two years, and no payments are required on most federal student loans since March 2020. Meanwhile, interest has stopped accumulating and debt collections have stopped. suffering were suspended.

Biden and former President Donald Trump have taken steps to extend the break. More recently, Biden moved the payment restart date from September 30, 2021 to January 31, 2022, but the administration made it clear at the time that this would be the final extension.

Some Democrats pressured Biden to extend relief

New York Senate Majority Leader Chuck Schumer, Senator Elizabeth Warren and Representative Ayanna Pressley, both of Massachusetts, pressured Biden to extend the student loan repayment hiatus and applauded the announcement of the extension.

“Extending the break will help millions of Americans make ends meet, especially as we overcome the Omicron variant,” Schumer, Warren and Pressley said in a statement.

But they continued to urge Biden to take further action and write off up to $ 50,000 in student loan debt per borrower.

Biden said during the presidential campaign that he would support the cancellation of $ 10,000 per borrower, but took no action to do so beyond asking federal agencies to conduct reviews to determine if he had. the power.

Asked earlier this month about this campaign pledge, Psaki said executive authority over the cancellation of student loans was still under review and added that the president supported congressional action on the issue. .

“If Congress sends him a bill, he’s happy to sign it. They haven’t sent him a bill on it yet,” she said.

Biden has repeatedly resisted pressure to write off up to $ 50,000 per borrower since taking office, which made it clear at a CNN town hall earlier this year that he did not support l ‘idea.
Separately, since taking office, Biden’s Department of Education has made it easier for people who have been conned by for-profit colleges to apply for debt relief. It also temporarily expanded the civil service loan forgiveness program that cancels the unpaid debt of eligible public service workers after making payments for 10 years.

Prepare to resume payments

“As we prepare for the return to repayment in May, we will continue to provide tools and support for borrowers so they can complete a repayment plan that is appropriate for their financial situation, such as an income-based repayment plan. Education Secretary Miguel Cardona said in a statement Wednesday.

Most borrowers on 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 students and parents on behalf of their children, are eligible for the loan. ‘advantage. Certain federal loans that are guaranteed by the government but not technically owned by the government, known as Federal Family Education Loans, or FFELs, were not eligible. In general, these were disbursed before 2010.

The relief is even greater for those working in the public sector and may be eligible for the federal student loan exemption after 10 years. They still receive credit for those 10 years of required payments as if they had continued to make them during the pandemic, as long as they are still working full-time for eligible employers.

Borrowers will receive a billing statement or other notice at least 21 days before their payment is due, according to the Department of Education. Those who had automatic payments in place may need to let their loan management company know that they want them to continue.

If federal student loan borrowers can no longer afford their monthly payment, they may be eligible for an income-based repayment plan. Under these plans, which are based on income and family size, a monthly payment can be as low as $ 0 per month. The Department of Education has more information online about restarting the payment.

CNN’s Maegan Vazquez contributed to this report.

About Renee Williams

Check Also

Interest rates on bank deposits and loans: March 2022

05/05/2022 – Press releases -The weighted average interest rate on new deposits remained unchanged at …