Many borrowers of federal student loans have not made payments for over two years. The payment pause will end on May 1, which is just 26 days away. Joe Biden is increasingly likely to extend the student loan payment pause yet again, although so far, no official announcement has been made. Here’s the current situation.
Student Loan Payment Pause Expires in 26 days
Congress enacted the CARES Act in March 2020 in response to the Covid-19 pandemic, which has caused a long-running pause on most student-loan payments (specifically for government-held federal student loans). Students in default on federal student loans were also given relief from interest accrual and all collection efforts under the CARES Act.
When the CARES Act was passed, Congress intended it to provide relief for six months. As the Covid-19 pandemic and its economic fallout worsened, the relief was extended several times. Both President Trump and President Biden extended relief several times. Only a few weeks remain in Biden’s latest extension.
Some Democrats push for student loan cancellation
Sen. Elizabeth Warren of Massachusetts and Senate Majority Leader Chuck Schumer of New York has urged Biden to broadly cancel up to $50,000 of student loan debt per borrower.
During his presidential campaign, Biden supported some federal student debt cancellation. Since taking office, he has resisted pressure to cancel debt on his own by executive order.
Joe Biden has instead urged Congress to pass legislation that cancels $10,000 per borrower. Last year, he argued the government shouldn’t forgive debt for people who went to Harvard, Yale, and Penn.
In addition, the Biden administration has expanded existing loan forgiveness programs for public sector employees, for-profit colleges defrauded borrowers, and permanently disabled borrowers.
More than 700,000 borrowers have been able to cancel more than $17 billion in federal student loans.