White House announces final extension of student loan repayment pause

WASHINGTON, Aug 6 (Reuters) – U.S. President Joe Biden’s administration on Friday announced a final extension of a coronavirus relief pause on federal student loan repayments, interest and collections until Jan. 31, 2022.

The extension of the pause, which had been due to expire on Sept. 30, comes as cases of the Delta variant of the coronavirus continue to surge around the United States.

The Department of Education “believes this additional time and a definitive end date will allow borrowers to plan for the resumption of payments and reduce the risk of delinquency and defaults after restart,” a White House statement said.

The department, the statement said, will begin notifying borrowers about the final extension in the coming days and “release resources and information about how to plan for payment restart as the end of the pause approaches.”

“It is the department’s priority to support students and borrowers during this transition and ensure they have the resources they need to access affordable, high-quality higher education,” the statement quoted Education Secretary Miguel Cardona as saying.

In a separate statement, Biden said the pause extension is needed because the “road will still be long” for many borrowers despite Friday’s jobs report showing July’s unemployment rate at a 16-month low of 5.4 percent. read more

Senate Majority Leader Chuck Schumer and two fellow Democratic lawmakers hailed the extension, but said the measure did not go far enough.

“Our broken student loan system continues to exacerbate racial wealth gaps and hold back our entire economy,” he said in a statement with Senator Elizabeth Warren and Representative Ayanna Pressley. “We continue to call on the administration to use its existing executive authority to cancel $50,000 of student debt (per borrower).”

Reporting by Jonathan Landay, Timothy Ahman and Mohammad Zargham; Editing by Leslie Adler, Sonya Hepinstall and Sandra Maler

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