Biden extends federal student loan repayment freeze – The GW Hatchet

Media credit: Colin Bohula | Photographer

The White House had previously argued that the repayment hiatus would not last beyond the initial January 31 endpoint.

President Joe Biden expanded the moratorium on federal student loans until May 1 across the country spikes of COVID-19 cases driven by the Omicron variant.

Student loan borrowers have been able to suspend their monthly bills without incurring interest on their debt since March 2020 in the wake of the pandemic epidemic. The White House had previously maintained that the repayment break would not last beyond the end point previously set on January 31.

Biden said the US Department of Education will work with borrowers over the next 90 days to get back to collecting regular loan payments.

“Now, with our job recovery being one of the strongest ever – with nearly 6 million jobs added this year, the fewest Americans filing for unemployment in over 50 years and an overall unemployment rate of 4.2% – we know millions of student loan borrowers are still facing the impacts of the pandemic and need more time to resume payments, ”Biden said in one declaration Wednesday.

Biden said borrowers should prepare to return to regular loan payments to ensure personal financial stability and help boost the national economic recovery.

“As we take this step, I ask all student loan borrowers to do their part as well: Take full advantage of the Department of Education’s resources to help you prepare for resumption of payments; explore options for reducing your payments with income-based repayment plans; explore the cancellation of public service loans; and make sure you are vaccinated and boosted when you are eligible, ”the statement read.

The pause on student loan repayments will help 41 million U.S. student loan borrowers save a total of $ 5 billion per month, according to the federal government. The data.

It is estimated that 89% of student loan borrowers are not financially secure enough to start paying off their student loans by February 2022, according to a survey conducted by the Student Debt Crisis Center and Savi, two financial advocacy groups.

Education Secretary Miguel Cardona said the extension would ensure borrowers have the resources they need to start repaying their debt by early 2022.

“This further extension of the repayment break will provide critical relief to borrowers who continue to face financial hardship as a result of the pandemic and allow our administration to assess Omicron’s impacts on student borrowers,” said Cardona in a press release. declaration.

Cardona said ED has provided nearly $ 13 billion in aid to more than 600,000 student loan borrowers.

“Students and borrowers will always be at the center of our work in the Department, and we are committed not only to ensuring a smooth return of repayment, but also to increasing the accountability and customer service of our loan officers as borrowers prepare for repayment ”Cardona’s statement reads.

Dorothy H. Lewis