Home ›› 08 Aug 2021 ›› World Biz
The Biden administration on Friday announced that the moratorium on federal student loan payments would be extended until Jan 31, just weeks before the pause was set to expire at the end of September.
In a statement, the Department of Education said that this would be the “final extension” and that it felt that a “definitive end date” would reduce the risk of delinquency and defaults once payments restart. Debt relief advocates and some Democrats had been pressuring President Joe Biden to extend the payment pause as the country navigates the economic uncertainty of the pandemic. Many also argued that it was unfair to let the moratorium expire at the end of September without giving borrowers ample time to prepare.
“The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency,” Secretary of Education Miguel Cardona said in a statement. “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 federal student loan payment moratorium began in March 2020 when Congress passed the CARES Act, which paused payments through September 2020 and kept interest rates at 0 percent for the roughly 42 million federal borrowers in response to the pandemic.