Because of Covid-19, a moratorium was enacted on student loan payments. And as there have been ongoing talks about ending the moratorium throughout the past two years, new Covid surges quickly dismissed those talks. And its latest extension was extended from May 2022 through the end of August.
The pause on student loan payment fell under the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES act. The Act includes a $2.2 trillion economic stimulus bill that was signed into law by President Trump in March, 2020.
On April 6, the U.S. Department of Education reported an extension of the pause on student loan repayment from May 1 to August 31. Most federal student borrowers have been free from payment since the beginning of the pandemic. But from the initial moratorium until its most recent, there have been multiple extensions along the way.
Trump’s initial moratorium was slated to end on Sept 30, 2020, but was extended twice until Dec 31, 2020, and then again until Jan 31, 2021. And when Biden came into office, he requested further extensions.
“In January 2021, on my first day of office, I directed the Department of Education to pause federal student loan repayments through September of that year,” Biden said. The Acting United States Secretary of Education, Phil Rosenfelt, prolonged the pause until Sept, 2021. But every time one extension was coming to its end, a new extension was granted.
Despite the administration’s assurances that this would be the final extension, in Dec, 2021, the Department of Education stated that the pause would be further extended until May. And now, another unexpected extension through August.
“We are still recovering from the pandemic and the unprecedented economic disruption it caused,” Biden said. The student loan payment extension is “to assist borrowers in achieving greater financial security and support the Department of Education’s efforts to continue improving student loan programs.”
And Biden has the support of Miguel Cardona, U.S. Secretary of Education. “This additional extension will allow borrowers to gain more financial security as the economy continues to improve and as the nation continues to recover from the COVID-19 pandemic,” Cardona said. “It remains a top priority for the Biden-Harris Administration to support students, families, and borrowers – especially those disproportionately impacted by the pandemic,” he continued.
The Biden administration and the Department of Education are not rushing the repayment to preclude any sudden adverse effects on borrowers. However, Biden’s republican friends don’t necessarily see it that way.
Although Republicans may have initially agreed with the moratorium, they may not have anticipated the multiple extensions past the original end date in Sept, 2020 that Trumped enacted. Some of them think the student loan relief is “outrageous.”
“President Biden’s perpetual student loan payment moratorium is an insult to every American who responsibly paid debts,” said Senator Tom Cotton of Arkansas. Cotton believes that repaying student loans is a personal responsibility. He thinks that when student loan borrowers fail to meet their financial obligations, the burden of the debt will eventually fall back on the government.
Cotton’s sentiments have been echoed by Virginia Ann Foxx, U.S Congresswoman of North Carolina’s 5th congressional district. “Hardworking taxpayers are fed up with having their backs broken by this administration,” Foxx said.
But despite republicans’ aversion to the continuous extensions, Cardona’s argument is that this is a temporary measure until the effects of Covid-19 have subsided significantly enough for borrowers to comfortably resume making payments.
“During the pause, we will continue our preparations to give borrowers a fresh start and to ensure that all borrowers have access to repayment plans that meet their financial situations and needs,” Cardona said. “The Department of Education is committed to ensuring that student loan borrowers have a smooth transition back to repayment.”
