Student Loan Payment Pause Extension: Biden Plans To Halt Them Until August 31st

Posted on

The Biden administration intends to halt payments on federal student loans until August 31.

During the coronavirus outbreak, the White House extended a moratorium that enabled millions of Americans to defer payments.

After being stopped since the beginning of the epidemic, student loan payments were set to resume on May 1.

The White House intends to offer borrowers more time to prepare for payments in response to concerns from Democrats in Congress.

According to the most recent figures from the Education Department, the measure affects more than 43 million Americans who owe a total of $1.6 trillion in federal student debt.

More than 7 million borrowers have defaulted on student loans, which means they have missed at least 270 days of payments.

Borrowers will not be required to make payments until after August 31, and interest rates will stay at 0% throughout that time.

Senator Patty Murray stated that additional time is required to assist Americans in planning for repayment and to reconsider the government’s current student loan repayment structure.

“It is ruining lives and holding people back,” she said in a statement last month.

“Borrowers are struggling with rising costs, struggling to get their feet back under them after public health and economic crises, and struggling with a broken student loan system and all this is felt especially hard by borrowers of color.”

Following the outbreak, Murray called on the Biden administration to pull all debtors out of default and provide them a “fresh start.”

The decision is being made amid growing concerns that if payments resumed in May, a huge number of Americans would fall behind fast.