The Biden administration has extended the pause on federal student loan payments through the end of January. Loans were initially paused when Congress passed the CARES Act in March 2020, which was set to end in September. This is said to be the last time loans will be deferred.
About 44.7 million Americans owe over $1.7 trillion in student loan debt. 56% of seniors from public/nonprofit colleges in 2019 graduated with student loan debt. Students borrowed approximately $102 billion for the 2019-20 academic year, 14% of those being private and other non-federal loans.
Education Secretary Miguel Cardona said, “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,”
Senators Schumer and Warren, along with Representative Ayanna Pressley added, “While this temporary relief is welcome, it doesn’t go far enough. Our broken student loan system continues to exacerbate racial wealth gaps and hold back our entire economy.”
Representative Virginia Foxx rebutted, “This extension does a grave disservice to borrowers across the country, and our children will pay the ultimate price for this irresponsible delay.”
Progressive lawmakers have been pressuring Biden to cancel up to $50,000 per borrower of federally held student debt via executive order. Speaker Nancy Pelosi argued that the President does not have the authority and that Congress would need to pass a bill. The President believes he could cancel as much as $10,000 in debt per borrower. The administration has canceled over $1.5 billion in student loan debt to date.
Cardona put out a statement saying, “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.” Payments will begin coming due again on February 1st.
But North Carolina Senator Richard Burr said the extension “actively works against the interests of students, borrowers, and taxpayers. Based on the cost of prior loan pauses, this extension will cost an estimated $20 billion to subsidize over the next four months, on top of the $76 billion already spent on the loan pauses over the last year and a half.”