Biden extends COVID relief for student debt through January 2022
The Biden administration has extended pandemic relief for student debt through Jan. 31, 2022, the Department of Education announced on Friday.
Driving the news: The Education Department said it's the final extension of the freeze on federal loan payments, which has maintained a 0% interest rate and pause on collections of defaulted loans. The current moratorium on payments was originally scheduled to end on Sept. 30.
- Americans owe about $1.6 trillion in student loans. Without an extension, more than 3o million people would've had to start making student loan repayments in October, even as the pandemic raged on.
Details: The agency noted that the additional time and definitive end date will give borrowers room to plan ahead and reduce the risk of delinquency or defaults.
- Federal officials will also move to improve student loan servicing in an attempt to help borrowers transition back into repayment, per the department.
What they're saying: "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," Secretary of Education 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 plan for restart and ensure a smooth pathway back to repayment," Cardona added.
- "It is the Department’s priority to support students and borrowers during this transition and ensure they have the resources they need to access affordable, high quality higher education."
The big picture: Top Democrats have called on President Biden to extend the student loan pause for weeks, urging him to cancel $50,000 per borrower.
- The administration has canceled over $55.6 million in student loan debt for victims of for-profit college fraud.
- The Education Department says it has also approved $1.5 billion in borrower defense claims and reinstated $1.3 billion in loan discharges.