President Joe Biden will continue a pandemic-spurred pause on student loan repayments until May 1, he said Wednesday.
Loan repayments were set to restart Jan. 31, following months of the U.S. Education Department not requiring payments during the pandemic. Biden told the department to extend the moratorium initially placed by President Donald Trump’s administration. It was the third extension Biden has directed.
Trump’s administration froze requirements to repay student loans in the pandemic’s early days in March 2020. Upon taking office, Biden extended the pause for six months, saying that many borrowers in the pandemic-rocked economy were still having difficulty paying.
As that deadline approached, he extended it through Jan. 31, 2022, but had been under pressure in recent weeks to push it back further as the highly transmissible omicron variant has spread through the U.S.
An Education Department news release said the pause would allow the administration to review the omicron variant’s effects.
“This additional extension of the repayment pause will provide critical relief to borrowers who continue to face financial hardships as a result of the pandemic, and will allow our Administration to assess the impacts of Omicron on student borrowers,” Education Secretary Miguel Cardona said in the release.
Biden said Wednesday the freeze has benefited 41 million Americans and was still needed, even amid a recovering economic landscape.
“While our jobs recovery is one of the strongest ever — with nearly 6 million jobs added this year, the fewest Americans filing for unemployment in more than 50 years, and overall unemployment at 4.2 percent — 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 White House news release.
“This is an issue Vice President Harris has been closely focused on, and one we both care deeply about.”
Senate Democratic Leader Chuck Schumer of New York and leading Massachusetts progressives Sen. Elizabeth Warren and Rep. Ayanna Pressley applauded the move and renewed their call for Biden to cancel $50,000 in federal loans per borrower.
“We cannot let our guard down in our fight to protect Americans from both the health risks of COVID-19 and the economic fallout from the ongoing pandemic,” he said in a statement. “This is the right thing to do for student loan borrowers and families across the country.”
In North Carolina, 1.3 million individuals owe roughly $48 billion in student loan debt. The average debt a student carries tops $36,000.
Jaylon Herbin, outreach associate at the Center for Responsible Lending (CRL), praised this week’s decision by the Biden Administration.
“We commend the President for safeguarding student loan borrowers at a time of profound economic uncertainty,” said Herbin. “The extension of the payment pause is a critical step toward restoring economic stability for borrowers and their families. We urge the Biden Administration to continue extending the payment pause until the pandemic and the associated economic crisis have been overcome.”