President Joe Biden.
Evan Vucci/AP
The Biden administration extended the student-loan payment pause through January 31, 2022.
During this time, borrowers’ student debt, along with its interest, won’t grow.
The pause was set to lift at the end of September, but many lawmakers and advocates said borrowers needed more time.
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Nearly two months before the pause on student-loan payments was set to lift, the Biden administration extended the student loan freeze through January 2022.
On Friday, the administration renewed the pause on payments, along with waived interest, to give borrowers more time to financially prepare to restart their payments.
This decision answers the calls of many Democrats and advocacy groups who have argued that both borrowers and servicers need more time to prepare to resume paying off, and collecting, student loans, especially for those still reeling from the financial effects of the pandemic.
"The payment pause has been a lifeline that allowed million of Americans to focus on their families, health, and finances instead of student loans during the national emergency," Secretary of Education Michael Cardona said in a statement. He described it as a "final extension."
Massachusetts Sen. Elizabeth Warren has been a leading Democrat calling not only for a payment pause extension, but $50,000 in student debt cancelation for every borrower. In June, Warren and some of her Democratic colleagues sent a letter to all student-loan companies requesting information on how they were preparing borrowers to restart payments, and in mid-July, Warren released the responses. The main finding was that those companies were not prepared to collect borrowers’ payments come October.
The findings came after significant efforts from lawmakers and organizations to ensure borrowers are well-equipped to resume paying off their debt.
On June 23, 64 Democrats, led by Senate Majority Leader Chuck Schumer and Warren, urged Biden in a letter to extend the payment pause until March 31 or until the economy returns to pre-pandemic employment levels, whichever is longer.
The next day, 128 organizations including the American Civil Liberties Union and the Service Employees International Union sent a letter urging the president to extend the payment pause until the administration has followed through on its promises to fix the student-loan system and cancel federal student debt.
And in a letter on June 30, Sen. Patty Murray and Rep. Bobby Scott, the chairs of the Senate’s and the House’s education committees, urged Biden to extend the payment pause until early 2022 to ensure that borrowers have the information they need to restart payments.
Even as Biden answered the calls to extend the payment pause, pressure is still mounting for him to follow through on his campaign promises and cancel student debt for every borrower.
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Source: https://www.businessinsider.com/biden-extends-student-loan-debt-payment-freeze-pause-extension-borrowers-2021-7
