The Biden administration is extending a pause on federally-backed student loans for the rest of the year, giving borrowers a longer reprieve as the economy recovers from the pandemic.
White House officials claimed this is the final time the federal government will extend the payment freeze for loans held by the Department of Education. The hiatus maintains a 0% interest rate and halts collection efforts on defaulted loans.
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Borrowers are expected to resume making payments on February 1, 2022.
Secretary of Education Miguel Cardona supported the extended pause.
“As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment,” the secretary said.
In a statement, Sen. Chuck Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.), and Rep. Ayanna Pressley (D-Mass.) praised the White House’s move to help “borrowers facing a disastrous financial cliff,” but said it doesn’t go far enough. Instead, they want the president to use executive authority to cancel $50,000 of student debt for each borrower.
“We’re pleased the Biden administration has heeded our call to extend the pause on federally-held student loan payments,” the statement read. “Our broken student loan system continues to exacerbate racial wealth gaps and hold back our entire economy.”
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