Biden Extends Pause on Loan Repayment

Federal student loans do not have to be repaid until Sept. 1. President also erases defaults for millions of students.

April 7, 2022
President Joe Biden, an older man with white hair wearing a suit and tie.
President Biden
(White House)

President Biden on Wednesday extended by four months, to Sept. 1, the pandemic-era pause on repaying federal student loans.

The move appears to have pleased very few in Washington—Democrats urged him to do more and cancel some or all federal student loans. Republicans said he should let the pause end.

In announcing the extension, the fourth of his administration, President Biden noted, “In January 2021, on my first day in office, I directed the Department of Education to pause federal student loan repayments through September of that year. At the time, our economy was barely growing. Fewer than 1 percent of Americans were fully vaccinated. Millions of Americans were struggling to stay afloat. Because of that pause in repayments, 41 million Americans were able to breathe a little easier during some of the toughest days of the COVID-19 pandemic.”

But today, “America is stronger than we were a year ago—and we will be stronger a year from now than we are today.”

He said he was acting because “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.”

At the same time, he said, “I’m asking all student loan borrowers to work with the Department of Education to prepare for a return to repayment.”

That statement, and the fact that the extension is only for four months, disappointed some who have called for the president to do more.

The Education Department issued a release Wednesday that tried to draw attention to other progress the administration has made on student debt:

  • It promised to revamp the Public Service Loan Forgiveness program in October. Already, the department has identified more than 100,000 borrowers eligible for $6.4 billion in loan relief.
  • It provided $7.8 billion in relief for more than 400,000 borrowers who have a total and permanent disability.
  • It approved $2 billion in borrower-defense claims to approximately 107,000 borrowers, including extending full relief to approved claims and approving new types of claims.
  • It provided $1.26 billion in closed-school discharges to more than 100,000 borrowers who attended the now-defunct ITT Technical Institute.

The Education Department also announced that “all borrowers with paused loans [will] receive a ‘fresh start’ on repayment by eliminating the impact of delinquency and default and allowing them to reenter repayment in good standing.”

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Julie Peller, executive director of Higher Learning Advocates, wrote on Twitter, “The ‘fresh start’ for student loan borrowers is a boon for the 31 mil adults with some college & no degree. While in default, #todaysstudents can’t access federal student aid- locking them out from future education. It’s good policy & incredibly helpful for returning adults!”

Reactions to the President’s Plan

U.S. Senator Patty Murray, a Democrat from Washington State and chair of the Senate Health, Education, Labor, and Pensions Committee, issued a statement after President Biden’s action.

“Last month, I pushed the Biden Administration to extend the student loan payment pause—because we can’t ask borrowers to resume payments until we fix the broken student loan system. I’m glad they took action today, but there’s much more to do,” she said. “This pause is urgently needed and will take stress off the shoulders of so many borrowers, but we need long-lasting change and a student loan system that actually works for students and borrowers—not just quick fixes.”

Specifically, she urged the Biden administration to “forgive some debt for all borrowers and fix our student loan system once and for all—including by fixing our badly broken income driven repayment system and creating a new Public Service Loan Forgiveness program that works for our public servants.”

But Representative Virginia Foxx of North Carolina, the Republican leader on the House Education and Labor Committee, issued a statement blasting the president.

“Like clockwork, the Biden administration continues to govern by executive fiat without any consideration for the consequences of its actions,” Foxx said. “Today’s decision is par for the course. The Education Department has provided zero information to everyone involved, including the servicers who will be tasked with carrying out this ‘operation.’ This ambiguous and flippant roll out will lead to mass confusion among borrowers likely causing new defaults. This is what happens when reckless ambition supersedes commonsense [sic].”

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Scott Jaschik

Scott Jaschik, Editor, is one of the three founders of Inside Higher Ed. With Doug Lederman, he leads the editorial operations of Inside Higher Ed, overseeing news content, opinion pieces, career advice, blogs and other features. Scott is a leading voice on higher education issues, quoted regularly in publications nationwide, and publishing articles on colleges in publications such as The New York Times, The Boston Globe, The Washington Post, Salon, and elsewhere. He has been a judge or screener for the National Magazine Awards, the Online Journalism Awards, the Folio Editorial Excellence Awards, and the Education Writers Association Awards. Scott served as a mentor in the community college fellowship program of the Hechinger Institute on Education and the Media, of Teachers College, Columbia University. He is a member of the board of the Education Writers Association. From 1999-2003, Scott was editor of The Chronicle of Higher Education. Scott grew up in Rochester, N.Y., and graduated from Cornell University in 1985. He lives in Washington.

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