Amid concerns about the new omicron variant of the Covid-19 virus, the Biden administration will extend the payment pause for federal student loan borrowers until May 1.
“We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,” President Joe Biden said in a statement on Wednesday.
Since March 2020, borrowers have been given the option to press the pause button on their monthly bills without interest accruing on their debt. Almost all borrowers have accepted the relief, research shows.
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The forbearance was scheduled to expire at the end of next month, on Jan. 31.
Yet Democrats and advocates have been pressuring President Biden to give the 42 million Americans with student debt more time. Another virus surge is also adding to worries about the economy and borrowers’ ability to resume their payments.
Recent polling of student loan borrowers found that even among those who are fully employed by now, 89% are still not financially secure enough to restart payments.
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. The average monthly bill is around $400 a month.
Scott Heins, 33, a freelance photographer in Brooklyn, who owes over $20,000, said he was relieved by the news. Much of his income dried up during the pandemic.
“Little by little things are getting better,” he said. “But it remains to be seen how much of a weight omicron has on my work.”
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