WASHINGTON (NBC News) — The Biden administration announced Friday an extension of the federal student loan payment moratorium until Jan. 31, just weeks before the pause was set to expire at the end of September.
In a statement, the Department of Education said this would be the "final extension" and that a "definitive end date" would reduce the risk of delinquency and defaults after payments restart.
Debt relief advocates and some Democrats had been pressuring President Joe Biden to extend the payment pause as the country continues to navigate the economic uncertainty of the coronavirus pandemic. Many also argued it was unfair to let the moratorium expire at the end of September without giving borrowers ample time to prepare.
"The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency," Secretary of Education Miguel Cardona said in a statement. "As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment."
The federal student loan payment moratorium began in March 2020 when Congress passed the CARES Act, which paused payments through September 2020 and kept interest rates at 0 percent for the roughly 42 million federal borrowers in response to the coronavirus pandemic.
President Donald Trump then took executive action to extend the student loan payment deferral through January, and Biden on his first day in office signed an executive order continuing the pause through Sept. 30.
Consumer advocates have warned that turning federal student loan payments back on after will be a massive undertaking for the Education Department and will require a significant amount of outreach from the Biden administration to make sure borrowers are aware that payments are once again due.