December 22, 2021 | WASHINGTON, DC — Today, President Biden announced an extension of the pause on student loan payments, interest charges, and debt collection in response to new public health and economic data. Tens of millions of student loan borrowers will no longer be expected to make payments until at least May 1, 2022. In the past month, the rapid spread of the Omicron variant has driven new COVID-19 cases to record levels as the dual threats of economic instability and historic inflation batter American families this holiday season.
In response to today’s announcement, SBPC executive director Mike Pierce issued the following statement:
“President Biden and Vice President Harris threw a lifeline to tens of millions of people with student debt, ensuring a student loan bill will not add to the financial burden posed by rising inflation and a resurgent pandemic. This is an enormous relief for families who would have been forced to choose between paying student loan bills and putting food on the table this winter.
Although we commend the administration for delivering this necessary, short-term relief to people with student debt, we continue to advocate for the extension of the pause on student loan payments until the end of the COVID-19 national emergency, giving the Department of Education time to fix the broken student loan system and finally keep the president’s promise to cancel student debt. Borrowers must be granted the relief they deserve.”
BACKGROUND
Unlike prior announcements, the White House refrained from calling this extension “final”— a clear sign that the administration will align future decisions regarding the student loan payment pause with economic conditions for student loan borrowers amid a rapidly shifting pandemic.
Earlier this month, the Student Borrower Protection Center led a coalition of more than 200 labor, civil rights, consumer, student, veterans, disability, and professional organizations in urging President Biden to abandon its plans to restart student loan payments on February 1st.
Last week, a new poll demonstrated that seventy percent of voters, including a majority of Republicans, support pausing student loan repayments during the pandemic.
Earlier today the National Consumer Law Center and SBPC released a new analysis showing the devastating effect that resuming student loan payments at the same time that Child Tax Credit benefits are cut off would have across the country. The research demonstrated that without immediate action, millions of American families would see a negative swing in their household finances averaging $800 per month.
Also earlier today, Fighting Chance for Families released a new poll revealing that almost half of borrowers expressed no confidence in their ability to make student loan payments should the Biden administration restart payments in February 2022 as planned, including pluralities of Democrats and Republicans, and a majority of independents. At the same time, fewer than 1-in-7 people with student debt are “very confident” in their ability to make student loan payments when they come due.
In December, the U.S. Bureau of Labor Statistics released new economic data indicating that the American economy is currently experiencing the highest level of inflation in nearly four decades. Prices rose 6.8 percent in November when compared to last year. For families across the country, this means that the cost of food, housing, and other basic necessities has spiked even as the threat of a resurgent COVID-19 pandemic looms. Read statement by SBPC Executive Director Mike Pierce.
On Monday, the Centers for Disease Control and Prevention reported that Omicron now accounts for nearly 75 percent of new COVID-19 cases, which are now surging across the country.