President Joe Biden is extending the pause on student loan payments through May 1 from January 31. As a result, tens of millions of people in the United States will now benefit from this.
The Biden administration has already extended the student loan moratorium through January 31. But considering the poor financial status of millions of people in the U.S. who has student loan debts, that date is now getting a further extension.
All the federal student loans interest rates will remain at 0% during this period. In addition to that, debt collection efforts will also be suspended. Joe Biden says the administration understands that borrowers are still coping with the impact of the pandemic.
The Biden administration has to decide whether they have to give another extension as the U.S. is struggling with the Omicron variant. The administration officials initially thought the January 31 moratorium deadline would be the last. But though the economy improved, the financial status of millions of borrowers was questionable. That led to the decision to extend the pause until May 1.
As per the available Education Department data, about 36 million people in the United States have student loans. Altogether that would be about $1.37 trillion. Unfortunately, many of these people are in a state of either default or delinquency. An average borrower’s monthly payment is about $400.
Earlier, some Democrats were arguing for massive forgiveness. Still, Biden doubted whether he could take that decision by himself or it was up to Congress to decide it. At that point, the administration was thinking of writing off the loans up to $10,000.
The Trump administration gave the initial extension for the student payment.