Topline
The Department of Education on Wednesday announced the nationwide pause on federal student loan repayment will be extended again, from January 31 to May 1, giving borrowers three extra months before federal student loan payments are required and the debt once again starts accruing interest.
President Joe Biden speaks about the omicron variant of the coronavirus in the State Dining Room of … [+] the White House on Tuesday.
Key Facts
In a statement on Wednesday, President Joe Biden said the extension is meant to help the nearly 41 million Americans receiving federal student loans “manage the ongoing pandemic,” and urged borrowers to get “vaccinated and boosted when eligible.”
Until the new deadline, borrowers won’t face additional interest, collections or be forced to make payments on federally backed student debt.
The move comes after the Education Dept. called its last extension, announced in August, the “definitive end date” for the pause on student loan repayment.
Former President Donald Trump first enacted the freeze at the height of pandemic uncertainty in March 2020.
Crucial Quote
“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,” Biden said Wednesday.
Key Background
The latest extension marks the fifth time the federal government has suspended monthly student loan payments during the pandemic and highlights the uncertainty around the wave of omicron variant-spurred wave of Covid infections. Though administration officials repeatedly insisted the pause in August would be the last, some lawmakers—including Senate Majority Leader Chuck Schumer (D-N.Y.)—have urged the president to announce another extension as new Covid cases jump to their highest levels in more than three months. As recently as Tuesday, White House Press Secretary Jen Psaki said Biden had still “not made a decision” on the matter—a stark pivot from less than two weeks earlier, when Psaki insisted relief would expire February 1. New Covid cases topped 188,000 on Tuesday, pushing the seven-day average to its highest level since early September.
Further Reading
Biden Administration Isn’t Ruling Out Another Student Loan Pause Due To Covid (Forbes)
