By Alice Seeley
On March 6, the Biden administration announced it is once again extending the pause on federal student loan payments, interest, and collections until Wednesday, August 31.
For the past two years, the federal government has paused payments and interest on federal student loans. This pause was scheduled to end Sunday, May 1. However, President Joe Biden stated that “if loan payments were to resume on schedule in May, analysis of recent data from the Federal Reserve suggests that millions of student loan borrowers would face significant economic hardship, and delinquencies and defaults could threaten Americans’ financial stability.”
This is the third time President Biden has extended the student loans pause, potentially impacting millions of Americans. This extension is most beneficial to borrowers who work in the public sector and are eligible for federal student loan forgiveness after 10 years.
Credit towards the 10 years of required payments is still being received during the pause. The Federal Reserve estimated that this pause has already benefited around 41 million borrowers, allowing them to save around $200 billion. 500,000 borrowers have taken advantage of no interest and kept repaying their loans during the pause.
Not everyone is pleased with Biden’s extension. Sen. Patty Murray (D-WA), chair of the Senate’s education committee, tweeted she wants Biden to extend the pause until 2023.
“With rising costs and still building back from the pandemic, this is not the time to make borrowers start paying again,” wrote Sen. Murray.
Rep. Virginia Foxx (R-NC), Chairwoman of the House Subcommittee on Higher Education, did not support the pause extension and pointed out that this pause has cost the federal government at least $95 billion.
“Another repayment freeze only begets unfairness that is inevitably leveled at both taxpayers and responsible borrowers alike,” said Rep. Foxx.
