The Biden administration once again extended the pause on student loan payments enacted to help borrowers during the COVID-19 pandemic, this time through the end of August.
Payments were scheduled to resume in May. But an analysis of recent data from the Federal Reserve suggests that millions of student loan borrowers would have faced significant economic hardship if that deadline had held, President Biden said in a statement Wednesday.
The move aims to help reduce the risk of delinquency and defaults, which can scar a borrower’s credit.
“This additional extension will allow borrowers to gain more financial security as the economy continues to improve and as the nation continues to recover from the COVID-19 pandemic,” Secretary of Education Miguel Cardona said in a statement.
The administration has grappled with ending the pause on loan payments as the economy’s recovery from pandemic lows continues — bringing with it inflation that has outpaced wage gains.
Domestic Policy Advisor Susan Rice advocated for the pause, and has been pushing within the administration to provide student loan relief, the official said.
The move builds on an announcement last year to overhaul the Public Service Loan Forgiveness Program, including to expand eligibility for loan forgiveness.
Still, some advocates who have been pushing for student debt to be canceled say temporary relief doesn’t go far enough.
“We recognize that extending the payment pause is important to borrowers struggling to shoulder the harm caused by the pandemic, economic shocks, and inflation. However, President Biden’s piecemeal, short-term approach is not enough to meet these challenging times,” said Natalia Abrams, president and founder of the Student Debt Crisis Center.
Others are calling for the administration to revise the complicated system of student loans.
Four months is not enough time to fix a system that has been broken for decades, Abby Shafroth, interim director of the National Consumer Law Center’s Student Loan Borrower Assistance Project, said in a statement.
“There is widespread agreement that the current student loan system is badly broken, that the student loan safety net has failed, and that millions of borrowers have been repaying loans that should have already been discharged,” Shafroth said.
