The Biden administration plans to again delay the repayment of federal student loans through the end of August 2022, according to an administration official and people familiar with the matter.
The current pause on payments was about to expire on May 1, impacting more than 40 million Americans. The new Aug. 31 extension is shorter than many Democrats asked for. They wanted it to go at least until the end of 2022. This sets up a fight for another extension just two months before the 2022 midterm elections, Politico reported.
The official White House announcement is expected on Wednesday, April 4. Federal student loan servicers were told to delay sending notices to borrowers that their monthly payments would be starting. A Biden administration official credited Susan Rice, Biden’s domestic policy adviser, as being a key negotiator in securing the extension.
“Since the beginning of the administration, she has advocated for each pause on the repayment of student loans, including this most recent one,” the official said.
Many progressive Democrats want Biden to cancel student loan repayments completely by executive action.
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“Tens of millions of people with student debt are once again in limbo as Washington plays politics with borrowers’ financial lives,” said Mike Pierce, executive director of Student Borrower Protection Center (SBPC), a nonprofit that works to end the student debt crisis. “Joe Biden needs to keep his promises to fix the broken student loan system and cancel student debt. As voters head to the polls in November, they will not settle for anything less.”
About 40 million people owe $1.6 trillion in federal student debt, which amounts to more than credit card or auto debt. The pause on student-loan payments has lasted longer than most other covid pandemic relief measures implemented by Congress and the White House, such as eviction moratoriums unemployment benefits, which expired in 2021. This will be Biden’s fourth student loan repayment pause. President Donald Trump also extended it twice.
Photo: In this Saturday, May 7, 2016 file photo, students cheer as President Barack Obama delivers the commencement speech during the 2016 Howard University graduation ceremony in Washington. (AP Photo/Jose Luis Magana, File)