Biden keeps student loan payments paused

The Biden administration is extending through Jan. 31, the pause on federal student loan payments that was set due to the coronavirus pandemic but the administration described it as the final extension.

Student loan payments, paused since Congress passed the CARES Act in March of last year, were due to resume in September.

During the pause, borrowers did not not need to make loan payments and interest did not accrue on their outstanding balance.

The federal Education Department described it as a "final extension of the pause" in the official announcement Friday afternoon.

The White House said the additional time will give student debters an opportunity to prepare to resume loan payments, reducing the risk that borrowers will be delinquent or default on their loans.

The latest extension gives borrowers six months before payments resume.

"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," said Education Secretary Miguel Cardona.

President Joe Biden extended the pause until September when he took office in January.

"The pause has been a critical lifeline so they don’t have to choose between paying for basic necessities or their student loan during the pandemic that upended their lives," said Biden.

"As today’s jobs numbers show, we have the tools that will allow us to beat COVID-19 and keep our economy recovering at a record rate," he continued, referencing the strong July jobs report. "But we know there is more work to do and the road will still be long for many people – especially for the one in six adults and one in three young people who have federal student loans."

Some Democrats reacted to the news by saying that it doesn’t go far enough, including Senate Majority Leader Charles Schumer (N.Y.).

"While this temporary relief is welcome, it doesn’t go far enough. Our broken student loan system continues to exacerbate racial wealth gaps and hold back our entire economy," Schumer said in a statement also signed by Sen. Elizabeth Warren (D-Mass.) and Rep. Ayanna Pressley (D-Mass.).

The progressive Democratic lawmakers want Biden to cancel up to $50,000 per borrower of federally held student debt with an executive order.

"We continue to call on the administration to use its existing executive authority to cancel $50,000 of student debt," the lawmakers said. 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."

Last month, the federal Education Department canceled about $56 million in student loan debt from 1,800 borrowers, raising the amount of student loan debt the administration has canceled to a total of $1.5 billion.

Republicans criticized the debt forgiveness.

Biden scored some points with progressive Democrats thus week when the White House reversed course this week and enacted a targeted eviction moratorium.

Biden allowed an earlier iteration of the eviction moratorium to expire Saturday because of a Supreme Court warning that the CDC exceeded its authority, a move that unleashed a major backlash from Democrats who warned millions of Americans were at risk of losing their homes.

The administration initially said its hands were tied by the June Supreme Court opinion and tried to put the responsibility on Congress to extend the moratorium.

After House Democrats failed to muster the votes to pass an extension before leaving for August recess and the legislation was also expected to be blocked by Senate Republicans, Biden shifted gears.

The new eviction ban announced by the CDC is scheduled to last until Oct. 3 and applies to counties experiencing high levels of community transmission of Covid-19.

The Biden administration scaled back the scope of the moratorium as it scrambled to come up with new safeguards for renters.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: