President Biden Extended The Pause On Student Loan Payments Through May 1

student loan pause extended by biden administration

In response to the pandemic, the Biden administration on Wednesday extended a student loan moratorium that has allowed millions of Americans to delay debt payments.

Student loans will remain paused for the remainder of the month through May 1. These measures have been in place since early in the pandemic, but were set to expire on January 31. Interest rates will remain at 0% during that time, and debt collection efforts will be suspended.

According to President Biden, the financial recovery from pandemic will take longer than job recovery, especially for people with student loans.

“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,” he said in a statement.

President Biden said the U.S. Department of Education will work with borrowers to transition back to collecting regular loan payments over the next 90 days.

COVID-19’s omicron variant that has swept through the United States has lent a new urgency to the issue of whether the moratorium will be extended. The administration initially said the January extension would be the last, but now that the economy is improving, there are concerns that borrowers are not ready to resume payments. Those who were already behind on payments could be forced to forfeit wages and benefits as part of the debt collection process after the moratorium ends.

As a means of ensuring personal financial stability and fostering economic recovery, Vice President Biden advised borrowers to return to regular loan payments.

“As we are taking this action, I’m asking all student loan 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; 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,” the statement reads.

According to government data, the student loan pause will save 41 million American borrowers $5 billion per month.

According to a survey conducted by the Student Debt Crisis Center and Savi, two financial advocacy groups, 89 percent of student loan borrowers will not be financially stable enough to begin repaying their student loans by February 2022.

The extension will provide borrowers with resources they need to begin repaying their debts at the beginning of 2022, said Secretary of Education Miguel Cardona.

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