Biden administration extends freeze on federal student loan payments through May 1
President Joe Biden announced on Wednesday that student loan relief will be extended again, this time until May 1. The president indicated that pandemic relief would go toward about 41 million federal student loan borrowers.
Since the onset of the pandemic, loan payments, as well as interest accruals and collections of federal student loans, have been paused. The halt on payments started under the CARES Act, which then was extended by former President Donald Trump, former Education Secretary Betsy DeVos, and also President Biden.
Prior to Wednesday’s development, Biden let borrowers know they should prepare to start paying in February of 2022. He previously had said, “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.”
Now, borrowers will have that time. The Student borrower Protection Center is an organization that has been urging Biden to extend the pause on loan payments.
“We don’t need to start the student loan system right now,” said Mike Piece, the program’s executive director. “Nothing about the trajectory of the pandemic and of Omicron suggests that things are immediately better in a way that makes us comfortable sending people student loan bills.”
Experts have said the process of resuming loan payments will be messy due to so many back and forth interactions between loaners and borrowers. A 2020 report from the Education Department said loan servicers and the federal government will “face a heavy burden in ‘converting’ millions of borrowers to active repayment.”
Borrowers in default, which includes over 7 million people, could have the hardest time making payments once they resume. Those borrowers are more likely to be low income, have some college and no degree, or work in low-wage jobs.