Biden extends student loan repayment pause through May 1

Biden said millions of student debtors still need more time before they can resume payments.

US President Joe Biden urged students to take steps to 'prepare for payments to resume' in May [File: Evelyn Hockstein/Reuters]

President Joe Biden extended the pause on student-loan repayments by another three months as the U.S. faces a fresh wave of Covid-19 cases from the omicron variant.

The move on Wednesday takes the moratorium through May 1. Biden had initially extended the pause through September after he took office and then stretched the end to Jan. 31. The president has faced pressure from Democratic lawmakers to provide the extension.

“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,” Biden said in a statement. He urged students to take steps to “prepare for payments to resume,” including looking at lower payments, exploring loan forgiveness and getting vaccinated and boosted.

A total of 43.2 million student loan borrowers across the U.S. hold a cumulative $1.75 trillion in student loan debt, 58% of which is held by women. Black women hold an average of $37,600 in student loan debt, according to the Education Data Initiative, higher than any other group.

In a November survey by the Student Debt Crisis Center, almost 90% of 33,073 respondents said they weren’t financially stable enough to resume payments.

Biden has said he would consider a plan to cancel up to $10,000 in student-loan debt for individual borrowers. White House Press Secretary Jen Psaki said he is still waiting for Congress to offer a bill to that effect.

–With assistance from Ella Ceron.

Source: Bloomberg