Biden Extends Pause On Federal Student Loan Payments

The Biden administration announced Wednesday that it will extend the pause on federal student loan payments through the end of August.

“We are still recovering from the pandemic and the unprecedented economic disruption it caused,” Biden said in a statement announcing the move.

Biden said the goal of the extended moratorium is to give people with student debt “greater financial security.” The president also said the Department of Education is working on improving student loan programs. 

Education Secretary Miguel Cardona said the department wants to give borrowers a fresh start by quote, “eliminating the impact of delinquency and default and allowing them to re enter repayment in good standing.”

This is the sixth time the pause on federal student loan payments has been extended over the past two years.

Federal student loan payments were initially paused by the Trump administration in March, 2020, when the COVID-19 pandemic began. Trump extended the pause once, and Biden has already extended it an additional four times. The pause was previously set to expire on May 1.

The pause on loan payments affects about 40 million people who owe about $1.6 trillion in federal student debt. That represents about 90% of the total outstanding student debt. Students who owe debt to private lenders are not eligible for this pause.

Overall, the pause on federal student loan payments has saved borrowers about $5 billion every month.

Proponents of the policy say the loan payment moratorium helps students by giving them a reprieve from crushing student debts.

Critics, however, say the extension is an unfair burden on taxpayers. Senator Joni Ernst, a Republican, argued that pausing student loans again is “shortsighted” and an unfair deal for the Americans who did not take on debt yet will ultimately be stuck with the bill. Instead, Ernst said, we should make sure students have a clear picture of the costs before they take out a loan so others will not be forced to pay it later.

Some progressives have gone further and advocated for canceling student loans altogether.

One of the most prominent progressives in Congress, New York Congresswoman Alexandria Ocasio-Cortez, took to Twitter to say that pausing loan payments is not enough and that “we should cancel them.” Ocasio-Cortez added that borrowers say they would have to delay medical procedures or sell their car to start repaying their loans again.

Senator Patty Murray, another Democrat, hailed the decision to continue the pause, but she said students need more than “quick fixes.” Murray is among several Senate Democrats who have called for student loan forgiveness, rather than just a pause on payments.

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