WASHINGTON – The US Department of Education announced on Friday it was extending a moratorium on federal student loan payments until January 31, 2022.
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The agency said it was the “final extension” of the break, which the Trump administration began in March 2020, The New York Times reported. The CARES law passed by Congress initially suspended payments until September 2020 and kept interest rates at 0% for nearly 42 million federal borrowers, according to NBC News. Former President Donald Trump extended the postponement until January 2021, and President Joe Biden signed an executive order on the first day of his term to extend the hiatus until September 30, 2021, the network reported.
“The payment hiatus has been a lifeline that has allowed millions of Americans to focus on their families, health and finances rather than student loans during the national emergency,” the secretary said. Education, Miguel Cardona, in a statement. “As our country’s economy continues to recover from a deep hole, this latest extension will give students and borrowers the time they need” to begin planning for resuming payments.
The moratorium on payments does not include borrowers with private loans, NBC News reported.
Lawmakers in favor of student debt relief have praised the extension.
“While this temporary relief is welcome, it does not go far enough,” said Senate Majority Leader Chuck Schumer, Senator Elizabeth Warren, D-Mass., And Rep. Ayanna Pressely, D-Mass. , said in a joint statement.
“Since the start of the COVID-19 pandemic, millions of Americans have struggled to keep a roof over their heads, pay their bills and put food on the table,” said the Senator Patty Murray of Washington. and Representative Bobby Scott of Virginia, wrote in a June letter. “As the economy has started to show promising signs of recovery, more than nine million Americans remain out of work and the economic and health disparities created by the pandemic are severe.
“We continue to call on the administration to use its current executive power to write off $ 50,000 in student debt. Canceling student debt is one of the most important steps President Biden can take right now to build a fairer economy and tackle racial inequalities, ”they added.
The White House said the Education Department is reviewing Biden’s legal authority to write off debt through executive action, NBC News reported.
The Federal Reserve estimated that in the second quarter of 2021, Americans owed more than $ 1.7 trillion in student loans.
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