Presiden Joe Biden, citing the ongoing COVID-19 crisis, has done the right thing by extending the pause on student loan payments until May 1.
The payments, which had been on hold since the start of the pandemic in March 2020, were set to restart on Feb. 1, prompting much outrage about the timing.
But the surge of the omicron variant across the country has led the Biden administration to cancel that controversial plan.
CNN and other media outlets reported on the extension.
Biden issued the following statement on his decision to extend the moratorium on student loan payments until May 1:
"Given these considerations, today my Administration is extending the pause on federal student loan repayments for an additional 90 days — through May 1, 2022 — as we manage the ongoing pandemic and further strengthen our economic recovery," Biden said in the statement. "Meanwhile, the Department of Education will continue working with borrowers to ensure they have the support they need to transition smoothly back into repayment and advance economic stability for their own households and for our nation."
Biden added:
“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,” adding it was an issue he and Vice President Kamala Harris “both care deeply about.”
What Biden’s decision means is that payments on federal student loans will remain on hold until May 1. Interest rates will remain at 0% during the moratorium, and debt collection efforts will be suspended.
On Wednesday, Jen Psaki, the White House press secretary, said that Vice President Kamala Harris along with other advisers helped persuade Biden to extend the moratorium.
“This is something the president has thought a lot about over the past several days,” Psaki said, adding that conversations with Ms. Harris “led to the decision to extend until May,” The New York Times reported.
It is indeed welcome news, especially after the Biden administration was dealt a blow when Sen. Joe Manchin announced he would vote no on the Build Back Better act, the cornerstone of the president’s domestic policy agenda. But hope springs eternal that some version of BBB might yet pass.
But concerns remain that even if the moratorium ends on May 1, student loan borrowers might still not be ready to resume payments.
According to the Department of Education, more than 36 million Americans have student loans that are held by the federal government, amounting to a collective debt of more than $1.37 trillion. The average monthly payment is $400 a month, and about a third of borrowers are in default or delinquency.
Officials said the extended moratorium — which would keep interest rates at 0% — would also benefit about 5 million other borrowers who are currently in school. They are not yet paying back their loans, but accruing interest..
The Department of Education also issued a statement announcing the extension.
“Since Day One of this Administration, the Department has focused on supporting students and borrowers throughout the pandemic and ensuring they have the resources they need to return to repayment successfully,” U.S. Secretary of Education Miguel Cardona said in the statement.
“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. As we prepare for the return to repayment in May, we will continue to provide tools and supports to borrowers so they can enter into the repayment plan that is responsive to their financial situation, such as an income-driven repayment plan.”
The extension gives the Biden administration more time to consider the bigger issue of student debt forgiveness.
Biden has said in the past that he supports canceling up to $10,000 in student debt, but has argued that Congress should do it. Progressive Democrats have proposed that up to $50,000 in student debt be forgiven.
The administration has asked the Departments of Education and Justice to look at the issue of whether the president has the authority to cancel debt by executive order,and if so how much debt could be cancelled.
And here’s some reaction to Biden’s announcement:
Of course, not a Tweet from Republican lawmakers welcoming this development.