Borrower balances were frozen by the Trump administration nearly two years ago with the passage of the CARES Act in March 2020. Since then, interest has stopped adding up and collections on defaulted debt have been on hold.
The Biden administration has also extended the payment freeze. Its latest extension on the debt expires Feb. 1, 2022.
“In the coming weeks, we will release more details about our plans and will engage directly with student loan borrowers to ensure that they have the resources they need and are in the appropriate repayment plan,” said Psaki.
“We’re still assessing the impact of the Omicron variant but a smooth transition back into repayment is a high priority for the administration.
“The Department of Education is already communicating with borrowers to help them to prepare for return to repayment and has secured contract extensions with loan servicers,” Psaki said.
Students across the country owe an estimated $1.7 trillion, according to data from the Federal Reserve.
In a speech on Nov. 16, President Joe Biden said student loans are holding borrowers up, and forgiving $10,000 “should be done immediately.”
“If Congress sends him a bill he’s happy to sign it,” Psaki told reporters Tuesday when asked if Biden would keep his campaign promise.
This year the Biden administration overhauled the Student Loan Forgiveness program, promising $1.74 billion for borrowers in the public service sector. It also eliminated $5.8 billion in federal student debt for borrowers with disabilities.