On Aug. 26, the Biden administration and the U.S. Department of Education continued the pause on payments for student loans. This will be the final extension and will end on Jan. 31, 2022.
COVID-19 significantly impacted the finances of the middle class citizens across the nation. Some of the first policies enacted by the government to help the middle class citizens last year were pausing student loan payments to those who were in debt. The extension was originally meant to expire Sept. 30, but has been pushed back to late winter.
“This final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment,” said Miguel Cardona, the Secretary of Education.
This is the sixth extension for student loan payments since it began on March 2, 2020 with the Coronavirus Aid, Relief and Economic Security Act. The original pause set by former President Donald Trump was set to last two months. A continuation of the pause occurred on Jan. 20, 2021 initiated by Biden on his first day of Presidency. Although the student loan payments have been paused for nearly two years, borrowers are already anticipating financial struggles when the pause is lifted.
The CARES Act was created to help struggling families, students and individuals to stay financially stable during the pandemic. Last spring, North Dakota State University distributed over $3,359,788 to 7,874 students. This allowed students to pay for housing, food, health care or other necessities that may have been disrupted by COVID-19. Students needing additional support could apply for further financial help.
Through this nearly two-year freeze on the financial accounts, borrowers have been allowed to pay their loans. Those still choosing to pay have been granted 0% interest on their student loans. By continuing their loan payments interest-free they are able to more quickly pay off student debt.
Student debt largely affects many Americans financially. According to Education Data, “43.2 million student borrowers are in debt by an average of $39,351 each.” The pause has allowed those in debt to more quickly pay off debt and use their finances toward other necessities.