Resumption of payments moved from May 1 to August 31.
President Joe Biden announced Wednesday the extension of the repayment freeze on federally held student loans through August 31. The deferral of both payments and interest that has been in place since the beginning of the pandemic in March of 2020 has already been extended several times. The pause in payments affects over 36 million borrowers, who collectively hold over $1.3 trillion in student loan debt.
President Biden stated, “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.”
The president also urged borrowers to prepare to resume repayments by working with the Department of Education to “prepare for a return to repayment” and “look into Public Service Loan Forgiveness, and explore other options to lower their payments.”
Education Secretary Miguel Cardona commended the extension of the pause, saying it would “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.”
The Federal Reserve Bank of New York reported that $195 billion worth of federal student loan payments has been waived through the present month. Some economists have questioned the deferral extension in light of the resulting injection of money into the economy during a time of increasing inflation.
As the Lord Leads, Pray with Us…
- For wisdom for the president and his economic advisors as they evaluate measures and policies addressing pandemic recovery and inflation.
- For Chief Operating Officer Cordray as he oversees Federal Student Aid.
- For Secretary Cardona to seek God’s direction as he leads the Education Department.
- For the nation’s continued recovery from the coronavirus pandemic.
Sources: CBS News, DailyWire
