Following a request from President Biden, the Education Department said Wednesday, January 20, it would extend the suspension of federal student loan payments through to September 30.
This is in fulfilment of Biden’s pledge to give borrowers some breathing room as the economy struggles to find its footing.
Borrowers, who owe a collective $1.5 trillion, would not be required to make payments on their federal student loans, their loans would not accrue any interest and all debt collection activity would halt through September.
Congress paused student debt payments last March as part of a virus relief package, and the Trump administration extended it twice.
“Too many Americans are struggling to pay for basic necessities and to provide for their families, they should not be forced to choose between paying their student debts and putting food on the table, the Education Department said in a statement Wednesday.
In the statement, the acting secretary of education added that the agency would extend the pause on federal student loan payments and collections and keep the interest rate at 0 per cent.
Biden’s request for the extension was part of a series of actions he took on his first day as president.
Student loan forgiveness was not included in Biden’s executive order, as progressive advocates had hoped. Biden has indicated that he will defer to Congress to prepare and enact additional student loan reforms. Meanwhile, the extended moratorium will provide millions of student loan borrowers with immediate additional relief, while giving lawmakers time to craft additional student loan proposals.