WASHINGTON — The Biden administration is considering an extension of the moratorium on federal student loan payments just weeks before it is set to expire as the highly-transmissible omicron variant poses a new threat to the economy.
A spokesperson for the Department of Education said Tuesday that the administration would announce later this week “whether to extend the pause further.”
Administration officials said in September that they did not intend to extend the pause beyond the existing Jan. 31 deadline, warning borrowers that they should be prepared to resume payments in February. For weeks the White House has maintained that President Joe Biden would stick to that timeline, even as Covid cases began to increase and as inflation concerns began to grip the country.
White House press secretary Jen Psaki said earlier Tuesday that “the president has not made a decision yet” on whether to extend the payment pause.
Debt relief advocates and some Democratic lawmakers have been pressuring Biden to extend the moratorium, especially since the president’s Build Back Better plan — which the White House has argued would lower costs for Americans — has failed to pass the Senate.
Rep. Alexandria Ocasio-Cortez, D-N.Y., tweeted last week that it was “delusional” to believe Democrats could get re-elected without acting on student debt relief, among other priorities.
The federal student loan payment moratorium began in March 2020 when former President Donald Trump signed into law the CARES Act, which paused payments through September 2020 and eliminated interest rates for the roughly 42 million borrowers.
Trump later took executive action to extend the student loan payment deferral period through January. Biden, on his first day in office, signed an executive order continuing the pause through Sept. 30.
The Biden administration extended the moratorium again in September, giving borrowers until Jan. 31 before having to make payments again. The Department of Education said at the time that it would be the “final extension” and that it felt that a “definitive end date” would reduce the risk of delinquency and defaults once payments restart.
The moratorium does not apply to borrowers with privately held loans.
The White House has said that the Department of Education is reviewing Biden’s legal authority to wipe out student debt through executive action, but the administration has not provided a timeline of that review.
Biden has said he does not believe he has authority to cancel student debt unilaterally, but would support Congress passing a bill canceling $10,000 in debt for each borrower.
In a recent interview with CBS News, Vice President Kamala Harris said she recognized that Democrats needed to take action on student debt before the 2022 midterm elections.
“I think that we have to continue to do what we’re doing and figure out how we can creatively relieve the pressure that students are feeling because of their student loan debt,” Harris said.