WASHINGTON — Following a request from President Joe Biden, the Education Department said Wednesday it would extend the suspension of federal student loan payments through Sept. 30.

The move came days before the moratorium was set to expire, at the end of this month. It makes good on Biden’s pledge to give borrowers some breathing room as the economy struggles to find its footing.

“Too many Americans are struggling to pay for basic necessities and to provide for their families,” the Education Department said in a statement Wednesday. “They should not be forced to choose between paying their student loans and putting food on the table.

In the statement, the acting secretary of education said the agency would extend the pause on federal student loan payments and collections and keep the interest rate at 0 percent.

Biden’s request for the extension was part of a series of actions he took on his first day as president.

To that end, consumer advocates and liberal lawmakers had hoped Biden would use executive authority to cancel some portion of the $1.6 trillion in outstanding student debt. The administration supports forgiving up to $10,000 in debt per person through congressional action.


The Democratic-controlled House passed legislation last year affording cancellation to borrowers through a stimulus package shelved by Senate Majority Leader Mitch McConnell, R-Ky.

Sen. Charles Schumer, D-N.Y., the incoming majority leader, has been unwavering in his support for debt cancellation and could clear a path forward. That would be a formidable challenge given the slim majority Democrats will have in the Senate, but advocates say it’s not impossible.

In the meantime, about 41 million Americans will continue to benefit from the federal government’s pause of student loan payments.

“This is really important,” said Jessica Thompson, associate vice president of the Institute for College Access & Success.”It allows borrowers to take a sigh of relief, [and] get out of this cycle of being reliant on the current politics of the day determining whether they’re going to have to start paying again.”

When the Education Department approves Biden’s request, all borrowers with student loans from the Education Department will see their payments automatically suspended until Sept. 30 without penalty or accrual of interest. Each month until then will still count toward loan forgiveness for borrowers in public-service jobs. It will also count toward student loan rehabilitation, a federal program that erases a default from a person’s credit report after nine consecutive payments.

Collections on defaulted, federally held loans are still halted, and any borrower with defaulted federal loans whose wages are being garnished will receive a refund. However, the directive still excludes more than 7 million borrowers whose federal loans are held by private companies or universities.


The Trump administration in March gave borrowers the option of postponing payments for at least 60 days as the coronavirus pandemic battered the economy. Congress later codified the reprieve in the stimulus package, known as the Cares Act, and made it automatic. The Trump administration twice extended the moratorium before leaving office.

Thompson said the latest extension will give the Education Department, the administration and Congress time to figure out how to successfully transition millions of borrowers back into repayment.

“It’s going to take a fair amount of thought to do this well, to do it carefully and to make sure we aren’t setting people up for failure or default when we try to kick-start payments,” Thompson said.

While many borrowers might have an easy time resuming payments, some will struggle to get back on track with their payments. Consistent and accurate information from the department and its contractors about options for people facing hardships will be essential to avoid a wave of defaults, Thompson said.

The Education Department reported a spike in people defaulting on their federal student loans in 2019 after exiting forbearance provided in the wake of natural disasters such as Hurricane Harvey and the California wildfires.

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