Biden Administration Extends Pause on Student Loan Payments – The New York Times
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The Biden administration, under pressure from Democratic lawmakers, announced a three-month extension, citing the resurgent pandemic.
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transcript
As you may have seen already, today the president announced that his administration is extending the pause on student loan repayments for an additional 90 days through May 1, 2022. We know some student loan borrowers are still coping with the pandemic and need some time before resuming payments, so this pause gives the administration time to manage the ongoing pandemic and further strengthen our economic recovery. In the meantime, the Department of Education — and they also issued a statement that hopefully you will have seen — will continue working with borrowers to support a smooth transition back into repayment and advance economic stability.
Katie Rogers and
WASHINGTON — President Biden, citing the pandemic, said on Wednesday that his administration had extended a moratorium on student loan repayments by 90 days, continuing a relief measure that began nearly two years ago under the Trump administration.
The extension affects about 41 million borrowers, including nearly 27 million who have not been paying their monthly bill since early 2020.
“While our jobs recovery is one of the strongest ever — with nearly six million jobs added this year,” Mr. Biden said in a statement, “we know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments.”
Since his first days in office, Mr. Biden has been pressured by Democratic lawmakers who have urged him to deliver on a campaign promise of seeking to forgive $10,000 per person holding federal student loan debt. Since taking office, Mr. Biden has called for Congress to pass a bill rather than forgive the amount through executive action. And he has avoided more ambitious calls from lawmakers, including Senator Chuck Schumer of New York, the Democratic leader, who have asked the president to forgive as much as $50,000 through executive action.
Instead, Mr. Biden has opted for repeatedly approving a pause on payments that has frozen interest accruals on tens of millions of loans. About 7.2 million borrowers who were in default got a reprieve from collections.
The so-called administrative forbearance was initially put in place as part of the Coronavirus Aid, Relief and Economic Security Act in March 2020, and was later extended by President Donald J. Trump. When Mr. Biden took office in January, he pushed the date back to Sept. 30, and then in August, he delayed it “one final time” to Jan. 31. On Wednesday, he postponed it to May 1, but both Mr. Biden and Miguel A. Cardona, the education secretary, emphasized that borrowers should begin preparing for payments to restart.
Mr. Cardona said the Education Department would work on “not only ensuring a smooth return to repayment” but also “stronger customer service from our loan servicers as borrowers prepare for repayment.”
Even so, the kind of sweeping forgiveness that many progressives and activists sought has remained elusive, and some of them quickly pointed out that the Biden administration could do more: “If you can afford to pause student loan payments over and over again, you can afford to cancel it,” Derrick Johnson, the president of the N.A.A.C.P., said in a terse statement.
In recent months, pleas to take sweeping action on student loans have gone unanswered by Mr. Biden, who has said he has been reluctant to explore executive action to forgive large amounts of student loan debt, lest that relief go to people attending elite colleges. But last week, Vice President Kamala Harris spoke publicly about the need to provide relief to borrowers.
“I had student loans,” Ms. Harris said during an interview with the radio and television host Charlamagne tha God. “I mean, look, right now, we have so many people, tens of millions of people in the United States who are dealing with student loan debt and responsibilities, and it’s standing in the way of them being able to start a family or buy a home. And it’s real, and we need to deal with it.”
On Wednesday, the White House sought to give Ms. Harris credit for her role in persuading the president to approve the extension. Jen Psaki, the White House press secretary, said conversations with advisers, including Ms. Harris, had led to Mr. Biden’s decision to extend the moratorium. Ms. Psaki said the president’s endangered social spending plan was not the main reason for the student loan extension.
“This is something the president has thought a lot about over the past several days,” Ms. Psaki said, adding that conversations with Ms. Harris “led to the decision to extend until May.”
The Biden administration has already canceled some debt through more targeted measures — it wiped away nearly $13 billion in loans for nearly 640,000 borrowers, according to the Education Department, including more than $7 billion for people with a “total and permanent disability.”
Activists praised the administration’s decision.
“The Biden administration has thrown a lifeline to student loan borrowers in the face of economic and public health reality,” said Mike Pierce, the executive director of the Student Borrower Protection Center. “This was a necessary action for borrowers to be able to stay afloat.
People who are struggling to repay student loan debt said the extension was helpful, if only temporary.
Linette Greene, a 56-year-old librarian from Ronan, Mont., said the loan freeze had helped her regain her financial footing — and she welcomed another three months of relief.
After experiencing financial hardships, including the death of her husband, her loans now amount to more than $79,000, or about $8,000 more than she borrowed. During the payment freeze, Ms. Greene put her financial life back in order, but she is concerned about what will happen after the pause lifts.
If the Biden administration could bring her loans out of default — something she has tried to do on her own with little success — it would be easier for her to become eligible for the Public Service Loan Forgiveness Program. That would enable her to settle her debt by the time she is 66.
Otherwise, she said, she will be paying the loans for the rest of her life.
“That would mean that I basically couldn’t retire until I died,” she said, “and they would be tacking that student loan bill onto my coffin as it is lowered into the ground.”
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