The Biden administration announced Friday it will extend the payment pause for federal student loan borrowers through January 2022.
Since March 2020, borrowers have been given the option to press the pause button on their monthly bills, without interest accruing on their debt. Some 90% of borrowers have been doing so. The pause was scheduled to expire next month.
President Joe Biden has been under pressure from Democrats and advocates to give the 42 million Americans with student debt more time.
More from Personal Finance:
Retired and returning to work: How your income may clash with other finances
Who would benefit from proposed changes to 401(k) catch-up contributions
Inflation concerns have many retirees worried about running out of money
The White House said this will be the final extension.
More than 66% of borrowers said they’re not ready to start their payments again, according to a recent survey conducted for The Pew Charitable Trusts.
“We’re pleased the Biden administration has heeded our call to extend the pause on federally held student loan payments, providing an enormous relief to millions of borrowers facing a disastrous financial cliff,” Sen. Minority Leader Chuck Schumer, D-N.Y.; Sen. Elizabeth Warren, D-Mass; and Rep. Ayanna Pressley, D-Mass., said in a joint statement.
The legislators also continued to pressure Biden to forgive up to $50,000 of student debt for all borrowers.
“While this temporary relief is welcome, it doesn’t go far enough,” they wrote. “We look forward to hearing the administration’s next steps to address the student debt crisis.”
Biden has asked the U.S. Department of Justice and the U.S. Department of Education to review his legal authority to forgive student debt. Decisions from those agencies are not yet public.
Borrowers were struggling before Covid. Outstanding student loan debt in the U.S. has surpassed $1.7 trillion and burdens Americans more than credit card and auto debt. Around a third of borrowers are in delinquency or default.