White House Says Student Loan Disbursement Extension To Jan.31

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WASHINGTON (NBC News) – On Friday, the Biden administration announced an extension of the federal student loan moratorium until January 31, just weeks before the pause expires in late September.

The Ministry of Education said in a statement that this will be a “final renewal” and that a “final end date” will reduce the risk of late payments and default after payments are resumed.

Debt cancellation supporters and some Democrats have pressured President Joe Biden to extend the pause in payments as the country continues to overcome the economic uncertainty of the coronavirus pandemic. Many also argued that it was unfair to allow the moratorium to expire at the end of September without giving borrowers enough time to prepare.

“The pause in payments has become a lifeline, allowing millions of Americans to focus on their families, health and finances instead of student loans during a national emergency,” Education Minister Miguel Cardona said in a statement. “As our nation’s economy continues to recover from a major pitfall, this final expansion will give students and borrowers the time they need to plan for a restart and ensure a smooth return to repayment.”

The federal student loan moratorium began in March 2020 when Congress passed the CARES Act, which suspended payments until September 2020 and kept interest rates at 0 percent for an estimated 42 million federal borrowers in response to the coronavirus pandemic.

President Donald Trump then took administrative action to extend the deferral of student loan repayments until January, and Biden signed an executive order extending the pause until September 30 on his first day in office.

Consumer advocates warned that recovering federal student loan payments will be a daunting task for the Department of Education and will require significant efforts on the part of the Biden administration to make sure borrowers know that payments are due again.



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