The Biden administration has extended pandemic relief for student debt through Jan. 31, 2022, the Department of Education announced on Friday.
Driving the news: The Education Department said it's the final extension of the freeze on federal loan payments, which has maintained a 0% interest rate and pause on collections of defaulted loans. The current moratorium on payments was originally scheduled to end on Sept. 30.
- Americans owe about $1.6 trillion in student loans. Without an extension, more than 3o million people would've had to start making student loan repayments in October, even as the pandemic raged on.
Details: The agency noted that the additional time and definitive end date will give borrowers room to plan ahead and reduce the risk of delinquency or defaults.
- Federal officials will also move to improve student loan servicing in an attempt to help borrowers transition back into repayment, per the department.
What they're saying: "The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency," Secretary of Education Miguel Cardona said in a statement.
- "As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment," Cardona added.
- "It is the Department’s priority to support students and borrowers during this transition and ensure they have the resources they need to access affordable, high quality higher education."
The big picture: Top Democrats have...