Biden Extends Student Loan Repayment Pause
Credit: Bloomberg / Contributor / Bloomberg / Getty Images- President Joe Biden extended the pause on federal student loan repayment to May 1, 2022.
- The pause was part of the CARES ACT passed in March 2020 and was set to expire on Jan. 31, 2022.
- Advocates pushed for an extension, citing the impacts of the omicron variant.
President Joe Biden extended the pause on federal student loan repayment another three months amid concerns over rising COVID-19 cases and the threats posed by the new omicron variant.
When Biden’s administration extended a moratorium on student loan repayment back in August, it said that it would be the last extension of the pause. However, with payments set to resume Feb. 1, the administration on Wednesday revealed that it will once again push back the restart date, this time to May 1.
“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”
— Joe Biden, President of the United States of America
“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,” Biden said in a statement Wednesday. “This is an issue Vice President [Kamala] Harris has been closely focused on, and one we both care deeply about.”
When Congress passed the CARES ACT in March 2020, federal student loans stopped accruing interest; That moratorium has previously been extended three times.
Biden’s move to once again extend the loan repayment moratorium comes on the heels of multiple setbacks for the administration. Biden’s signature Build Back Better domestic spending bill is in serious peril, while the omicron variant is threatening to extend the pandemic and derail the country’s economic recovery.
The administration has also weathered weeks of lobbying from progressive and moderate Democrats alike demanding he extend the payment pause.
U.S. Rep. Alexandria Ocasio-Cortez of New York has been one of the most vocal politicians campaigning for either an extension to the moratorium or an outright cancellation of student loan debt through an executive order. After tweeting Sunday that Biden should “take off the gloves and govern,” she took her case for extending the moratorium to Twitter first thing Monday morning.
— Alexandria Ocasio-Cortez (@AOC) December 20, 2021With BBB delayed, Child Tax Credits will expire and student loans will restart within a matter of weeks. Working families could lose thousands of $/mo just as prices are rising.
That alone is reason for @POTUS to act on student loans ASAP – w/ either moratorium or cancellation.
U.S. Rep. Pramila Jayapal of Washington followed up yesterday, tweeting that Biden must act on “student debt that is crushing millions of Americans.”
— Rep. Pramila Jayapal (@RepJayapal) December 21, 2021President Biden can and should cancel the student debt that is crushing millions of Americans — but in the meantime, this is a must.
The pandemic is raging, and the relief to withstand it must continue.https://t.co/k29xKawFPW
But it wasn’t just progressive Democrats pushing Biden to grant an extension. Senate Majority Leader Chuck Schumer of New York was one of three high-ranking members of Congress to send a letter to Biden in early December pressuring him to not only extend the pause but also cancel up to $50,000 in student loan debt per person.
Schumer praised Biden for deciding to extend the pause in a Tweet and said the next step was to cancel student debt “to help close the racial wealth gap and provide relief to so many.”
— Chuck Schumer (@SenSchumer) December 22, 2021I’ve been standing with @SenWarren, @RepPressley, & more calling on @POTUS to act.
It’s good he extended the pause on student loan payments amid Omicron—now he needs to #CancelStudentDebt to help close the racial wealth gap and provide relief to so many. https://t.co/WsamB1prlX
In his earlier letter, Schumer cited a report commissioned from the Roosevelt Institute that estimates $7.12 billion per month and $85.48 billion annually will be stripped from over 18.1 million student loan borrowers if payments resume Feb. 1 as scheduled.
A new survey from Bankrate and BestColleges further shows how the end of the forbearance period could have an impact on the lives of adults with federal student loans. Seventy-five percent of borrowers surveyed expected their finances to be negatively affected in February when payments were scheduled to resume, and more than 33% said that it will be harder to pay for everyday necessities, like groceries or household bills.