White House extends student loan repayment freeze through August
President Biden on Wednesday extended the pause on federal student loan repayments until August 31, 2022.
Why is this important: The moratorium, which was due to end on May 1, has allowed millions of people to defer their payments during the pandemic.
- This is the sixth time the loan repayment freeze has been extended since it began in March 2020.
What he says : “This continued pause will help Americans breathe a little easier as we recover and rebuild from the pandemic,” Biden said in a video announcing the decision.
- “I know people have been hit hard by the pandemic and although we’ve come a long way in the last year, we’re still recovering from the economic crisis it caused.”
- “This additional time will help borrowers achieve greater financial security and support the Department of Education’s efforts to continue improving student loan programs,” Biden said in a statement.
The big picture: Nearly 37 million borrowers have saved about $195 billion from the moratorium through April 2022, according to a report released last month by the Federal Reserve Bank of New York.
- The same report also found that student borrowers who did not benefit from the extended moratorium had 33% higher delinquency rates on other debts (excluding mortgages) than those who did, reports Axios’ Nathan Bomey. .
- The Biden administration in December extended its moratorium on student loan repayment until May 1, citing the ongoing pandemic.
Go further: Repayment of student loan repayments could cause problems for borrowers
Editor’s note: This article has been updated with more details on previous moratorium extensions.