Student loan payment pause could be extended past May.
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Good news for the 37 million Americans who have May 1 marked on their calendar with a skull: The Biden administration has signaled the possibility of once again extending the federal student loan payment freeze.
- The Dept. of Education emailed the companies that service federal loans and told them to hold off on reminding borrowers that payments would start again in May.
- White House Chief of Staff Ron Klain hinted that another extension was possible on Pod Save America.
If the student loan freeze were a band, this would mark its sixth straight encore—something that could make you wonder, “Why not turn this thing into a residency?” The legislation has saved federal student loan borrowers about $195 billion since it was implemented at the beginning of the pandemic, according to a new report by the Federal Reserve Bank of New York.
If forbearance were to end, NY Fed researchers predict a steep rise in delinquencies. With midterms looming, Democrats have urged Biden to push ahead with his campaign pledge to cancel a “minimum of $10,000” of student loan debt per person—or at least extend the freeze.
Not everyone’s celebrating, though. Private lenders, whose profits have been squeezed during the moratorium, have been aggressively lobbying the administration to restart payments or narrow the freeze to cover fewer borrowers.—MK
