President Biden speaks at a White House event on April 5. Photo: Al Drago/Bloomberg via Getty Images
President Biden on Wednesday extended the pause on federal student loan repayments through Aug. 31, 2022.
Why it matters: The moratorium, which had been scheduled to end on May 1, has allowed millions to postpone payments during the pandemic.
- It's the sixth time the loan repayment freeze has been extended since it began in March 2020.
What he's saying: "This continued pause will help Americans breathe a little easier as we recover and rebuild from the pandemic," Biden said in a video announcing the decision.
- "I know folks were hit hard by the pandemic and though we've come a long way in the last year we're still recovering from the economic crisis it caused."
- "That additional time will assist borrowers in achieving greater financial security and support the Department of Education’s efforts to continue improving student loan programs," Biden said in a statement.
The big picture: Nearly 37 million borrowers have saved about $195 billion from the moratorium through April 2022, according to a report released last month by the Federal Reserve Bank of New York.
- The same report also found that student loan borrowers who didn’t benefit from the extended moratorium had 33% higher rates of delinquency on other debt (excluding mortgages) than those who did, Axios' Nathan Bomey reports.
- The Biden administration in December extended its moratorium on student loan payments until May 1, citing the ongoing pandemic.
Go deeper: Return of student loan payments could spell trouble for borrowers
Editor's note: This article has been updated with more details on previous moratorium extensions.