The pause was initiated with the passage of the CARES Act in March of 2020 under then-President Donald Trump and Biden has maintained the pause throughout his time in office.
In total it has saved roughly 40 million borrowers an estimated $195 billion in waived payments through April 2022, according to the Federal Reserve (Fed).
Biden last extended the pause on repayments last December. The federal government was set to resume collections on May 1 on the $1.3 trillion in national outstanding direct student loan debt.
Biden announced Wednesday he’s now extending that deadline in a statement that says if loan payments were to resume in May, borrowers would face “significant economic hardship,” that could “threaten Americans’ financial stability.”
“We are still recovering from the pandemic and the unprecedented economic disruption it caused,” the statement reads.
Biden cites research from the Fed that shows delinquencies and defaults would increase if payments were to resume.
Prior to the initial outbreak of the CCP virus, direct loan borrowers were roughly split in half between those making progress on their loans and those with increasing balances. Nearly all borrowers stopped making payments when the pause on repayments began in 2020, according to the Fed.
“I’m asking all student loan borrowers to work with the Department of Education to prepare for a return to repayment, look into Public Service Loan Forgiveness, and explore other options to lower their payments,” Biden’s statement says.
Biden made a campaign promise to cancel at least $10,000 student debt per person, to no avail so far. However, the administration canceled nearly $7 billion in loans in March, including forgiving the debt of some 72,000 borrowers.
White House press secretary Jen Psaki said over the summer that Biden can only pause or delay payments and only Congress can unilaterally cancel them.
Some senators have disagreed, and have urged Biden to issue an executive order forgiving some or all of the debt.
In February, Biden moved to extend the COVID-19 national emergency beyond March 1. And his administration continues to plead with Congress to steer additional funds toward addressing the CCP (Chinese Communist Party) virus responsible for spreading the disease.
In a statement released Tuesday, Psaki expressed disappointment in Senate Republicans for voting down a bill that would add new funding for COVID. She points to an end to a reimbursement program for doctors who vaccinate the uninsured, the governments supply of monoclonal antibodies running out and a ramping down of the nation’s test manufacturing capacity.
“Today’s Senate vote is a step backward for our ability to respond to this virus,” Psaki said. “We will continue to work with the House and Senate to move this vital legislation forward.”
Zachery Stieber contributed to this report.