WASHINGTON — The U.S. Department of Education announced Friday that it is extending a moratorium on federal student loan payments through Jan. 31, 2022.
The agency said this is the “final extension” of the pause, which the Trump administration began in March 2020, The New York Times reported. The CARES act passed by Congress originally paused payments through September 2020 and kept interest rates at 0% for nearly 42 million federal borrowers, according to NBC News. Former President Donald Trump extended the deferral through January 2021, and President Joe Biden signed an executive order on his first day in office to extend the pause through Sept. 30, 2021, the network reported.
“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,” Education Secretary Miguel Cardona said in a statement. “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 begin planning to resume payments.
Breaking News: The U.S. Department of Education will extend the moratorium on federal student loan payments through Jan. 31. It had been set to expire next month. https://t.co/tVtcrDwVu6
— The New York Times (@nytimes) August 6, 2021
The payment moratorium does not include borrowers with privately held loans, NBC News reported.
Legislators favoring student debt relief praised the extension.
“While this temporary relief is welcome, it doesn’t go far enough,” Senate Majority Leader Chuck Schumer, Sen. Elizabeth Warren, D-Mass., and Rep. Ayanna Pressely, D-Mass., said in a joint statement.
“Since the beginning of the COVID-19 pandemic, millions of Americans have struggled to keep a roof over their heads, pay bills and put food on the table,” the heads of the Senate and House Education Committees, Sen. Patty Murray of Washington and Rep. Bobby Scott of Virginia, wrote in a June letter. “While the economy has begun to show promising signs of recovery, more than nine million Americans remain out of work, and the economic and health disparities created by the pandemic are severe.
“We continue to call on the administration to use its existing executive authority to cancel $50,000 of student debt. Student debt cancellation is one of the most significant actions that President Biden can take right now to build a more just economy and address racial inequity,” they added.
The White House said the Department of Education is reviewing Biden’s legal authority to wipe out debt through executive action, NBC News reported.
The Federal Reserve estimated that in the second quarter of 2021, Americans owed more than $1.7 trillion in student loans.
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