White House to extend moratorium on student loans through August, reports say
The Trump administration initially gave Americans the option to suspend loan payments in March 2020
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The Biden administration is expected to extend a pause once again on federal student loan payments though the proposed timeframe is far shorter than what Democrats had been pushing for, according to reports.
An administration official familiar with the White House's decision-making told The Associated Press that the freeze on payments will extend through August 31. Payments were scheduled to resume May 1 after being halted since early in the pandemic.
FILE - Secretary of Education Miguel Cardona speaks during a visit with first lady Jill Biden to Bergen Community College in Paramus, N.J., Jan. 20, 2022. (AP Photo/Seth Wenig, File)
The moratorium has allowed millions of Americans, hard hit by the coronavirus pandemic, to postpone payments. The extension would apply to more than 43 million Americans who owe a combined $1.6 trillion in student debt held by the federal government, according to the latest data from the Education Department.
Borrowers will not be asked to make payments until after Aug. 31, and interest rates are expected to remain at 0% during that period.
The extension was first reported Tuesday by Bloomberg. The White House and Education Department did not immediately return requests for comment.
President Joe Biden delivers a speech on infrastructure spending at Carpenters Pittsburgh Training Center, Wednesday, March 31, 2021, in Pittsburgh. (AP Photo/Evan Vucci)
Democratic lawmakers have been clamoring for the White House to give borrowers additional time to prepare, citing continued economic upheaval.
Last month, Sen. Patty Murray, D-Wash., said more time is needed to help Americans prepare for repayment and to rethink the government's existing system for repaying student debt.
"It is ruining lives and holding people back," she said in a statement last month. "Borrowers are struggling with rising costs, struggling to get their feet back under them after public health and economic crises, and struggling with a broken student loan system — and all this is felt especially hard by borrowers of color."
Other Democratic lawmakers have pressed Biden to use executive action to cancel $50,000 for all student loan borrowers, saying it would jumpstart the economy and help Black Americans who on average face higher levels of student debt.
President Joe Biden and the White House COVID-19 Response Team participate in a virtual call with the National Governors Association from the South Court Auditorium of the Eisenhower Executive Office Building of the White House Complex on Monday, Dec (Kent Nishimura / Los Angeles Times via Getty Images)
Last month, the St. Louis Federal Reserve Bank warned that resuming loan payments could place a heavy burden on borrowers – especially Black families – who faced financial hardship during the pandemic. It said the impact would be hardest on Black families.
The Trump administration initially gave Americans the option to suspend loan payments in March 2020, and Congress made it automatic soon after. The pause was extended twice by the Trump administration and twice more under Biden.
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It remains in question whether Biden will pursue widespread debt forgiveness to reduce the nation's student debt. Biden has said he supports canceling up to $10,000, but he argued it should be done through congressional action.
The Associated Press contributed to this report.