Biden administration extends student loan payment plan moratorium through end of August

President Joe Biden on Wednesday announced an extension of the payment pause on federal student loans through August 31st. The moratorium on student loan payments was previously set to expire on May 1st.

“I know folks were hit hard by this pandemic. And we’ve come a long way in the last year. We’re still recovering from the economic crisis it caused,” Biden said in a video statement. “This continued pause will help Americans breathe a little easier as we recover and rebuild from the pandemic.”

Biden administration officials had signaled in recent weeks that they were likely to extend the relief, telling federal student loan servicers to hold off on sending notices to borrowers that their monthly payments would be starting. The U.S. official pointed to Susan Rice, the president’s domestic policy adviser, as key in the negotiations securing the extension.

“Since the beginning of the Administration, she has advocated for each pause on the repayment of student loans, including this most recent one,” the official said.

Responding to a report Tuesday that the pause would be extended, Rep. Alexandria Ocasio-Cortez (D-NY) tweeted, “I think some folks read these extensions as savvy politics, but I don’t think those folks understand the panic and disorder it causes people to get so close to these deadlines just to extend the uncertainty.”

Federal student loan holders haven’t had to make payments since March 2020, when then-President Donald Trump signed into law the CARES Act, which paused payments through September 2020 and froze interest accumulation for the roughly 42 million borrowers.