Borrowers now have until May 1
Borrowers who were facing an end to the student loan payment moratorium can breathe a little easier today, as the Biden administration has pushed the deadline back three months. President Joe Biden announced the extension of the moratorium to May 1 on Wednesday. It’s possible there could be another extension at that time, but it seems Biden will wait to see how the economy is doing. Though progressive lawmakers have been calling for the president to cancel the debt altogether, he has been hesitant to do so.
While touting the comeback the economy made in the last year (GDP growth was 2.3% in the third quarter, revised up from earlier estimates), Biden acknowledging that millions of borrowers might not be in a financial position to resume student loan payments by February.
“Given these considerations, today my Administration is extending the pause on federal student loan repayments for an additional 90 days — through May 1, 2022 — as we manage the ongoing pandemic and further strengthen our economic recovery. Meanwhile, the Department of Education will continue working with borrowers to ensure they have the support they need to transition smoothly back into repayment and advance economic stability for their own households and for our nation,” Biden said in a statement.
He said Vice President Kamala Harris was instrumental in the decision to extend the moratorium and urged borrowers to use the intervening time to prepare for a resumption of student loan payments in May. More than 40 million Americans have some amount of student loan debt, so another three months without that money going toward payments will keep money circulating through the economy.
“It’s a real issue,” Harris told CBS News about the burden of student debt. “Graduates and former students across our country are literally making decisions about whether they can have a family, whether they can buy a home.”