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Biden extends student loan moratorium through August
The Biden administration will freeze federal student loan payments through Aug. 31, extending a moratorium that has allowed millions of Americans to postpone payments during the pandemic.
WASHINGTON - President Joe Biden "has not ruled out" using executive action to cancel student loan debts, White House Press Secretary Jen Psaki said.
Psaki made the comment Wednesday, the same day the Biden administration announced plans to freeze federal student loan payments through Aug. 31, extending a moratorium that has allowed millions of Americans to postpone payments during the coronavirus pandemic.
Student loan payments were scheduled to resume May 1 after being halted since early in the pandemic. But following calls from Democrats in Congress, the White House plans to give borrowers additional time to prepare for payments.
FILE - U.S. President Joe Biden speaks during a press conference in the State Dining Room at the White House on Nov. 6, 2021. (Samuel Corum/Getty Images)
The action applies to more than 43 million Americans who owe a combined $1.6 trillion in student debt held by the federal government, according to the latest data from the Education Department. That includes more than 7 million borrowers who have defaulted on student loans, meaning they are at least 270 days late on payments.
Borrowers will not be asked to make payments until after Aug. 31, and interest rates are expected to remain at 0% during that period.
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Some Democrats in Congress have pressed Biden to use executive action to cancel $50,000 for all student loan borrowers, saying it would jumpstart the economy and help Black Americans who on average face higher levels of student debt.
Last year, Biden asked the Education and Justice departments to review the legality of widespread debt cancellation, but Psaki said Wednesday that Biden still wants student loan debt canceled through congressional action.
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"He would encourage Congress to send him a bill canceling $10,000 in student debt, something that he talked about looking forward to signing on the campaign trail," Psaki said.
The Associated Press contributed to this report.