As one of his first executive orders, President Joe Biden directed the Department of Education to extend student loan relief by extending a pause on interest and principal payments for direct federal loans until at least September 30, 2021.
U.S. borrowers currently owe over $1.5 trillion in federal student loans.
At the U.S. onset of the coronavirus pandemic, borrowers were granted a pause on their loan payments in March 2020 as part of the CARES Act, with interest set to 0% and collections of defaulted loans put on hold. Former President Donald Trump and later Former Education Secretary Betsy DeVos extended it, setting it to expire on January 31.
Shortly after Biden was declared the winner of the 2020 presidential election, speculation grew over whether the new administration would extend the payment pause. Many in the new president’s camp have not only called for student loan payment relief but have also advocated for debt cancellation.
On December 17, Reps. Ayanna Pressley (D-MA), Ilhan Omar (D-MN), Maxine Waters (D-CA), and Alma Adams (D-NC) introduced a resolution that would cancel up to $50,000 in federally backed student loan debt for U.S. borrowers.
That legislative measure was in concert with a resolution created by Senate Majority Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA). However, in December, Biden told Karen Tumulty of the Washington Post that it was “unlikely” he would cancel $50,000 worth of debt for borrowers. “Well, I think that’s pretty questionable. I’m unsure of that. I’d be unlikely to do that,” he said.
Education-related expenditures are expected to be a big part of Biden’s first 100 days in office. In an address to the nation Thursday night Biden laid out his $1.9 trillion economic stimulus plans, which include $170 billion allotted to help schools across the nation safely reopen.
In a press release issued by the White House, the new administration called attention to the dire situation that many debt holders in the U.S. face.
“Too many Americans are struggling to pay for basic necessities and to provide for their families. They should not be forced to choose between paying their student loans and putting food on the table.”
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.