President Biden announced Tuesday that his administration will extend a pandemic-related pause on student loan repayments for an additional 90 days, giving borrowers until May 1 before payments restart.
In a statement issued by the White House, Biden said that “while our jobs recovery is one of the strongest ever — with nearly 6 million jobs added this year, the fewest Americans filing for unemployment in more than 50 years, and overall unemployment at 4.2 percent — we know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments.”
“This is an issue Vice President [Kamala] Harris has been closely focused on, and one we both care deeply about,” Biden continued.
Passed in the spring of 2020, the CARES Act suspended interest on college loans and payments. It was then extended via executive action by former President Donald Trump and twice previously by Biden. Those actions affected 40 million Americans, whose average student loan payments run $400 per month. Meanwhile, the extended child tax credits — which provided payments of several hundred dollars per month to most American families — expired this month, with no immediate extension expected to be passed.
Wednesday’s student loan announcement was a reversal from the Biden administration, which was set on resuming the loan payments on Feb. 1, 2022. Politico reported Saturday that meetings between the White House and student loan advocates had been tense, with one administration official suggesting that "Overall, the pandemic was trending in the right direction, and that resuming student loan payments is part of getting back to normal.”
But due to the sudden spread of the Omicron variant, the country has seen a 27 percent uptick in cases, a 13 percent rise in hospitalizations and a 4 percent increase in deaths over the last 14 days, according to tracking from the New York Times.
“Obviously, we’re still battling a pandemic,” White House press secretary Jen Psaki said at her daily press briefing Tuesday, when asked what prompted the White House to extend the student loan moratorium. “We know that borrowers across the country, even as the economy has made progress, are still grappling with [student loans], and this will give them a little more relief.”
Psaki rejected the suggestion that the decision was motivated by the recent collapse in negotiations over the president’s Build Back Better bill — which included an extension of the child tax credit payments.
“We would disagree with that characterization, as I think nearly every member of the Democratic caucus would as well, and we’re forging ahead to get it done,” Psaki said of the spending bill. The White House and congressional leadership had hoped for the social spending legislation to pass by Christmas, but opposition from Sen. Joe Manchin, D-W. Va., has pushed negotiations into 2022.
For weeks, prominent Democrats have been lobbying the White House to extend the student loan repayment deadline. They applauded Biden for extending the student loan repayment deadline. In a Dec. 8 letter to the White House, Senate Majority Leader Chuck Schumer, D-N.Y., Sen. Elizabeth Warren, D-Mass., and Rep. Ayanna Pressley, D-Mass., estimated that a resumption of payments would cost approximately 18 million American families more than $85 billion in 2022.
“In order to prevent the student debt crisis from dragging down on our economic recovery, undermining the effectiveness of the American Rescue Plan, and causing unnecessary pain and stress for American families, we strongly urge you to extend the pause on student loan payments and interest and act to cancel student debt,” the trio of legislators wrote.
Hours before the White House announced its decision, all nine House Democrats from Pennsylvania — including those in what are expected to be tight 2022 reelection races — wrote Biden a letter calling on him to extend the program. Their letter noted that “at least 320,000 veterans are saddled with student loans, and more than eleven percent are in default.”
After the announcement on the extension of the moratorium, Pressley, Schumer and Warren all praised the move but called for further action.
“Extending the student loan payment pause is a major relief for millions of Americans during this pandemic,” Warren wrote on Twitter. “I appreciate everyone who organized and pushed President Biden to take action, and I’m grateful he listened to our call. Next, [Biden] should [cancel student debt.]”