The Biden administration has extended the moratorium on federal student loan repayments, interest and collections until Jan. 31, 2022.
The Department of Education said Friday that the extension is final, and that the “additional time and a definitive end date will allow borrowers to plan for the resumption of payments and reduce the risk of delinquency and defaults after restart.”
The suspension period was originally set to apply from March 13, 2020 to Sept. 30, 2020, but was subsequently extended to Sept. 30, 2021. During this period, payments were automatically stopped for borrowers with qualifying loans.
“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.”
The department said it will begin notifying borrowers about the final extension in the coming days, and that it will release resources and information about how to plan for payments to restart as the end of the hold nears.
Lawmakers applauded the extension, but said it didn’t go far enough.
Senate Majority Leader Chuck Schumer D-N.Y., Sen. Elizabeth Warren, D-Mass., and Rep. Ayanna Pressley, D-Mass., said in a joint statement, “We’re pleased the Biden administration has heeded our call to extend the pause on federally-held student loan payments, providing an enormous relief to millions of borrowers facing a disastrous financial cliff.”
While the “temporary relief is welcome, it doesn’t go far enough,” the lawmakers said. “Our broken student loan system continues to exacerbate racial wealth gaps and hold back our entire economy. We continue to call on the administration to use its existing executive authority to cancel $50,000 of student debt. Student debt cancellation is one of the most significant actions that President Biden can take right now to build a more just economy and address racial inequity. We look forward to hearing the administration’s next steps to address the student debt crisis.”