President Biden on Wednesday announced a 90-day extension of a pause on the collection of federally backed student loan payments as the Omicron variant of COVID-19 creates new economic uncertainty.
The respite was scheduled to end Jan. 31, but it will be extended through May 1 after Biden faced pressure from young adults and left-wing Democrats. Interest rates will remain at 0% during that period, and debt collection efforts will be suspended.
Student loan payments were first paused by President Donald Trump in March 2020 at the start of the coronavirus pandemic. Biden has now extended the moratorium twice since taking office in January of this year.
“This is an issue Vice President Harris has been closely focused on, and one we both care deeply about,” the president said in a statement, adding that he was extending the pause “as we manage the ongoing pandemic and further strengthen our economic recovery.”
White House press secretary Jen Psaki told reporters Wednesday that “we know some student loan borrowers are still coping with the pandemic and need some time before resuming payment, so this pause gives the administration time to manage the ongoing pandemic and further strengthen our economic recovery.”
The moratorium affects more than 36 million Americans with student loans held by the federal government — a debt that totals more than $1.37 trillion, the Department of Education said.
The average monthly payment is about $400, and a third of borrowers are in default or delinquent.
In a statement, Education Secretary Miguel Cardona said the 90-day pause “will provide critical relief to borrowers who continue to face financial hardships as a result of the pandemic, and will allow our Administration to assess the impacts of omicron [sic] on student borrowers.”
Some Democrats are pushing for mass forgiveness of debt. But Biden has questioned whether he has the authority for that kind of mass cancellation, and legal scholars differ on that. Earlier this year, Biden asked the Education and Justice departments to study the issue. Officials have said that work is still underway.
Biden has previously said he supports canceling up to $10,000 in student debt, but he has argued it should be done by Congress.
In his statement, the president called on borrowers to take full advantage of Education Department resources as they prepare for payments to resume, look at options to lower payments through income-based repayment plans, explore public service loan forgiveness, and ” make sure you are vaccinated and boosted when eligible.”
With Post wires
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