April 6 (UPI) — The Education Department on Wednesday announced an extension of the student loan repayment pause through Aug. 31, delaying any interest and collections as well through the summer.
Progressive Democrats had been pushing Biden to extend the moratorium on student loan repayments. A group of Democratic lawmakers sent Biden a letter last month asking him to extend the pause until the end of the year.
“The Department of Education is committed to ensuring that student loan borrowers have a smooth transition back to repayment,” Education Secretary Miguel Cardona said, according to a statement. “This additional extension will allow borrowers to gain more financial security as the economy continues to improve and as the nation continues to recover from the COVID-19 pandemic.”
The White House said it was not the right time to end the moratorium with the country still emerging from the COVID-19 pandemic and the economic disruption still being felt.
“If loan payments were to resume on schedule in May, analysis of recent data from the Federal Reserve suggests that millions of student loan borrowers would face significant economic hardship, and delinquencies and defaults could threaten Americans’ financial stability,” the White House said in a statement.
Biden has received pushback from Republicans. On Tuesday, Sen. Tom Cotton complained the continued moratorium, which started under the Trump administration during the pandemic, has become a burden to taxpayers.
“President Biden’s perpetual student loan payment moratorium is an insult to every American who responsibly paid debts,” Cotton said on Twitter. “There’s no free lunch: this reckless move puts taxpayers on the hook for billions.”