On Wednesday, just hours after being sworn in, President Biden ordered the Education Department to extend the current COVID-19 suspension of all federal student loan payments and interest until at least October 1st.
The CARES Act — Congress' third coronavirus relief bill, which passed in March 2020 — directed the Education Department to suspend payments, stop collections, and set interest rates to 0% on all federally held loans. Former President Trump later extended those measures until January 31, 2021. Biden's order will automatically extend these measures for at least eight months. Borrowers will have no obligation to make payments, loans will not accrue interest, and the Education Department will stop collections on the one in five student borrowers who were in default even before the COVID-19 crisis. The student loan suspension applies to federally-held student loans which, according to CNN, include about 85% of total federal student loans, including direct federal loans and PLUS loans.
The move comes as Biden faces heavy pressure to cancel student loan debt altogether. Although Biden called for cancelling $10,000 in loans per borrower on the campaign trails, student loans were not included in the $1.9 trillion relief plan which the Biden team released last week.
You can read the Education Department's announcement here and more about Biden's student loan suspension here.
