Student Loan Payment Pause Extended Through May 1 Amid COVID-19 Surge

By Owen Daugherty, NASFAA Staff Reporter

Borrowers expecting to resume making payments on their student loans will see another reprieve as the Department of Education (ED) today announced another extension of the payment pause for federally-held student loans through May 1.

The announcement comes after months of pressure from Democratic lawmakers and student loan advocates who warned resuming payments after the pause expires on Jan. 31, 2022 would leave millions of borrowers struggling as the pandemic continues. 

“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,” President Joe Biden said in a statement.

The department for months insisted payments would resume in February after announcing a “final” extension of the pause that was first instituted at the onset of the coronavirus pandemic, but the surge in COVID-19 cases due to the omicron variant spurred the White House to issue another extension for borrowers through the spring. 

The 90-day extension will provide borrowers more time to prepare for the resumption of payments and will allow the Biden administration to assess the impacts of the omicron variant, the White House said in a statement announcing the extension.

“As we prepare for the return to repayment in May, we will continue to provide tools and supports to borrowers so they can enter into the repayment plan that is responsive to their financial situation, such as an income-driven repayment plan,” Education Secretary Miguel Cardona added. 

Rep. Bobby Scott (D-Va.), chairman of the House Committee on Education and Labor, applauded the administration’s decision in a statement, saying the move will provide “a financial lifeline to borrowers during this health crisis.”

“We cannot let our guard down in our fight to protect Americans from both the health risks of COVID-19 and the economic fallout from the ongoing pandemic,” Scott said. “This is the right thing to do for student loan borrowers and families across the country.”

The ranking member of the House Committee on Education and Labor, Rep. Virginia Foxx (R-N.C.), decried the decision, saying the Biden Administration is "continuing to use the pandemic to push his preferred progressive policies."

"Rather than adequately preparing and working with stakeholders to ensure a smooth transition into repayment, the Department has delayed information to borrowers, failed to communicate with servicers, and stonewalled Congress in order to provide back door loan forgiveness through administrative fiat," Foxx said in a statement

Notably, student loan servicers have been ramping up staffing and messaging to borrowers in preparation for the end of the student loan payment pause. Now, it's unclear how they will adapt to another extension, albeit a brief 90-day one.

For months top Democrats — led by Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.) — have called on President Biden to extend the moratorium on student loan payments and interest accrual until the economy reaches pre-pandemic levels of employment.

Progressive Democrats are again pushing for widespread student debt forgiveness through executive authority, arguing Biden has the power to do so without legislation from Congress.

The new extension of the student loan payment pause and faltering of Biden’s signature domestic policy agenda, the Build Back Better Act, has renewed progressives' call for an executive order to be used to issue some form of student loan forgiveness for millions of borrowers.

Angered by the current demise of the Build Back Better Act, progressives are doubling down on their calls for the White House to commit to using executive authority in a way to deliver on their policy priorities.

Previously, the “final” payment pause was seen as the last chance for student loan forgiveness as it was widely believed once the massive operation of getting borrowers back into repayment was underway it would be all the more difficult to implement loan forgiveness.


Publication Date: 12/22/2021

Angelene P | 12/23/2021 8:4:52 AM

Yes, Nice!!!

Jade L | 12/22/2021 2:18:33 PM


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