Biden Extends Pause on Student Loan Payments Through August

Biden Extends Pause on Student Loan Payments Through August
President Joe Biden speaks during an event to mark the 2010 passage of the Affordable Care Act in the East Room of the White House in Wash., on April 5, 2022. (Chip Somodevilla/Getty Images)
Nick Ciolino

President Joe Biden is again extending the pause on federal student debt repayments, this time through Aug. 31.

The pause was initiated with the passage of the CARES (Coronavirus Aid, Relief, and Economic Security) Act in March 2020 under then-President Donald Trump, and Biden has maintained the moratorium throughout his time in office.

In total, it has saved roughly 40 million borrowers an estimated $195 billion in waived payments through April 2022, according to the Federal Reserve.

Biden last extended the pause on repayments last December. The federal government was set to resume collections on May 1 on the $1.3 trillion in national outstanding direct student loan debt.

Biden said on April 6 that if loan payments were to resume in May, borrowers would face “significant economic hardship,” that could “threaten Americans’ financial stability.”

“We are still recovering from the pandemic and the unprecedented economic disruption it caused,” the statement reads.

Biden cited research from the Fed that shows delinquencies and defaults would increase if payments were to resume.

Prior to the initial outbreak of the CCP (Chinese Communist Party) virus, direct loan borrowers were roughly split in half between those making progress on their loans and those with increasing balances. Nearly all borrowers stopped making payments when the pause on repayments began in 2020, according to the Fed.

“I’m asking all student loan borrowers to work with the Department of Education to prepare for a return to repayment, look into Public Service Loan Forgiveness, and explore other options to lower their payments,” Biden said in the statement.

Biden made a campaign promise to cancel at least $10,000 in student debt per person. However, the administration canceled nearly $7 billion in loans in March, including forgiving the debt of some 72,000 borrowers.

White House press secretary Jen Psaki has said that Biden can only pause or delay payments and only Congress can unilaterally cancel them. Some senators have disagreed, and have urged Biden to issue an executive order forgiving some or all of the debt.

In February, Biden moved to extend the COVID-19 national emergency beyond March 1; his administration continues to plead with Congress to steer additional funds toward addressing the CCP virus responsible for spreading the disease.

In a statement released on April 5, Psaki expressed disappointment in Senate Republicans for voting down a bill that would add new funding for COVID. She points to an end of a reimbursement program for doctors who vaccinate the uninsured, the government’s supply of monoclonal antibodies running out, and a ramping down of the nation’s test manufacturing capacity.

“Today’s Senate vote is a step backward for our ability to respond to this virus,” she said. “We will continue to work with the House and Senate to move this vital legislation forward.”

Zachery Stieber contributed to this report.