Responding to calls from Democrats to cancel some or all of the $1.5 trillion in piled-up student debt, US President Joe Biden has announced the White House would extend the moratorium on repayments by another three months.
In a statement on Wednesday, Biden claimed the US economic recovery was “one of the strongest ever,” but that “millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments.”
Payments on federal student loans were originally suspended in March 2020, as part of the CARES Act intended to address the pandemic. The Trump administration extended the moratorium through the end of January 2021. Biden extended it twice again, first in January and then in August. As of Wednesday, the moratorium has been extended to May 1, 2022.
The Department of Education will “continue working with borrowers to ensure they have the support they need to transition smoothly back into repayment and advance economic stability for their own households and for our nation,” the White House said.
About 43 million Americans are estimated to owe more than $1.57 trillion in student loans to the federal government, for an average burden of $39,351 each. The compound interest on the loans has continued to accrue. Only about one percent of the debtors have reportedly made payments on their loans over the past year and a half.
A number of prominent Democrat lawmakers, from Senate Majority Leader Chuck Schumer (D-New York) to progressive ‘Squad’ leader Rep. Alexandria Ocasio-Cortez (D-New York), have called on Biden to cancel student debt outright. While Biden said this was an issue both he and Vice President Kamala Harris “care deeply about,” he has made no move to do so.
“I’m asking all student loan borrowers to do their part as well,” he said on Wednesday, suggesting they work with the Education Department to “prepare for payments to resume,” explore working for the government to get the loans forgiven, and “make sure you are vaccinated and boosted when eligible.”