Biden just extended the student-loan payment pause an additional 4 months — only 1 week before the deadline
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- Biden extended the pause on student-loan payments an additional four months, through December 31.
- This answered calls from advocates who worried borrowers would have to repay debt too soon.
- It came alongside news of $10,000 in student debt cancellation for federal borrowers.
President Joe Biden has extended the pause on student-loan payments for the fifth time while in office.
On Wednesday, Biden announced on Twitter that the over-two year federal pause on payments, with waived interest, will be extended yet again through December 31. This comes as after Democratic lawmakers and advocates were pushing for a further extension beyond August 31. This came alongside news of broad student-loan forgiveness of $10,000 for federal borrowers making under $125,000 a year, and advocates wanted to ensure the Education Department has time to fully implement that relief, along with other reforms to the student-loan industry.
It was unclear whether Biden would make the decision to extend the pause again, given his administration's concerns with inflation. Jared Bernstein, a member of the White House Council of Economic Advisers, previously told The New York Times that restarting payments would counter any inflationary impact of looming broad student-loan relief, and that Biden was taking so long with his student-debt decision to ensure whatever he implements would not exacerbate already-high inflation.
It appears Biden answered the calls of many Democratic lawmakers and advocates who were concerned borrowers would be thrown back into repayment too soon. Last month, 180 organizations called on Biden to extend the payment pause, writing in a letter that they "strongly urge your administration not to threaten the financial security of people with student debt as a tactic to fight inflation."
At the end of July, 107 Democratic lawmakers — including Senate Majority Leader Chuck Schumer and New York Rep. Alexandria Ocasio-Cortez — also pushed Biden to extend the pause.
"Resuming student loan payments would force millions of borrowers to choose between paying their federal student loans or putting a roof over their heads, food on the table, or paying for childcare and health care—while costs continue to rise and while yet another COVID-19 variant increases hospitalizations nationwide," they wrote in a letter.
On the flipside, Republican lawmakers will not be pleased with the news of this latest extension. Many of them have criticized the cost to taxpayers the previous payment pauses have brought on, with some even introducing legislation to ban Biden from extending the pause and canceling student debt broadly.
While the pause is now extended, giving borrowers more time to prepare for another monthly bill, student-loan companies have expressed concerns with implementing that relief on such short notice. Scott Buchanan, executive director of the Student Loan Servicing Alliance — a group that represents federal loan servicers — wrote in a letter ot Education Secretary Miguel Cardona on Monday that "it may not be possible to ensure that a full and complete delay in resumption could be effectuated systemically by September 1 for every borrower without incident."
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