President Joe Biden Extends Pause on Student Loan Payments

Just days before The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) became law on March 27, 2020, the Federal Student Aid office began providing Emergency COVID-19 Relief Flexibilities starting March 20.

Beatriz A. Martinez

Just days before The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) became law on March 27, 2020, the Federal Student Aid office began providing Emergency COVID-19 Relief Flexibilities starting March 20.

Last Wednesday, the Biden administration announced that there would be another pause in student loan payments. This extension is the sixth of the program in the two years of the pandemic. And comes less than a month before payments were scheduled to restart on May 1.

Biden had been facing pressure from some Democrats who argued many borrowers aren’t ready to shoulder another bill. More than a month ago, a group of Democratic legislators sent a letter to President Biden to extend the term of student loans.

They wanted President Biden to extend the moratorium until the end of the year. However, this extension is until August 31.

The White House said that this is not the right time to restore scheduled payments because the community and the country are still emerging from the COVID-19 and suffering the consequences. Likewise, the high inflation experienced in recent months has affected the economy of thousands of Americans.

“If loan payments were to resume on schedule in May, analysis of recent data from the Federal Reserve suggests that millions of student loan borrowers would face significant economic hardship, and delinquencies and defaults could threaten Americans’ financial stability,” said President Biden in a statement. He also added that this extension will help borrowers achieve greater financial security to return to payments without causing economic instability.

Some Representatives and Senators criticized Biden’s decision

However, not everyone is happy with this extension. Since the news broke it has been getting mixed reviews from both Democrats and Republicans. Some of them have expressed their discontent and disappointment through social media to this decision made by the Biden administration. 

Rep. Alexandria Ocasio-Cortez, D-N.Y, tweeted her thoughts on the matter. “I think some folks read these extensions as savvy politics, but I don’t think those folks understand the panic and disorder it causes people to get so close to these deadlines just to extend the uncertainty.” She added, “It doesn’t have the effect people think it does,” 

Also, Sen. Tom Cotton, R-AR, complained about the continued moratorium. “President Biden’s perpetual student loan payment moratorium is an insult to every American who responsibly paid debts,” Cotton said via Twitter.

The new extension means borrowers with student loans will see payments postponed without penalty or interest accrual for the duration of the pause extension. Additionally, the moratorium only applies to Department of Education student loans and does not apply to borrowers with private loans.

What to do for now?

First, update your information on your loan servicer’s website and in your StudentAid.gov profile. Then, register or review your auto-debit enrollment. And finally, find the most convenient payment in the Loan Simulator. For more information visit www.studentaid.gov