The Biden administration has announced the extension of a pause on federal student loan repayments through August 31, 2022, CNN reports.
Since the beginning of the pandemic, a moratorium on repayments of student loans was installed and had been scheduled to expire on May 1, 2022.
President Joe Biden said that while the economy is stronger than it was a year ago “we are still recovering from the pandemic and the unprecedented economic disruption 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,” he said. The President has moved the repayment date on three separate occasions.
Although the moratorium on payments will continue, some key Democratic lawmakers such as Senate Majority Leader Chuck Schumer of New York and Sen. Elizabeth Warren of Massachusetts have lobbied Biden to cancel up to $50,000 of student loan debt for every borrower.
While Biden is in favor of some federal student debt cancellation he has drawn the line at using his executive order power to cancel student debt. In contrast, Biden has urged Congress to pass a bill that would cancel $10,000 per borrower and floated the idea that cancellation should exclude high-income borrowers.
Additionally, the Biden administration has expanded existing loan forgiveness programs for borrowers who work in the public sector, those who were defrauded by for-profit colleges, and the permanently disabled. Those efforts have resulted in the cancellation of more than $17 billion in federal student loans for over 700,000 borrowers.
Without question, student debt disproportionately affects Black borrowers. According to CNBC, 86.6% of Black college students take out federal loans to attend four-year colleges, compared to just 59.9% of white students.
In a statement Wednesday, the Department of Education said that it will allow all borrowers with paused loans to receive a “fresh start” on repayments “by eliminating the impact of delinquency and default and allowing them to reenter repayment in good standing.”