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President Biden Extends Student Loan Payment Freeze Through Sept. 30

Middle-income family in debt.

Updated Jan. 21 at 3:10 p.m. ET

Following President Biden's executive action signed Wednesday, the Education Department extended pandemic relief for about 41 million federal student loan borrowers through Sept. 30.

"Too many Americans are struggling to pay for basic necessities and to provide for their families," the Education Department said in a statement. "They should not be forced to choose between paying their student loans and putting food on the table."

In March 2020, borrowers were granted a reprieve on their loan payments — interest was set to 0% and collections of defaulted federal student loans were paused. Congress initiated this relief in the CARES Act. Both President Donald Trump and, later, Education Secretary Betsy DeVos, extended it.

Before Biden's executive action, the relief was set to expire on Jan. 31.

The back and forth on deadlines has been a challenge for borrowers. Research from the Pew Charitable Trusts conducted in August and September found that, among borrowers who said the relief applied to them, about 40% did not know when their loan payments were set to resume. That research also found that borrowers are struggling financially due to the pandemic: Almost 6 in 10 borrowers with paused payments reported to Pew that it would be difficult to begin making their payments if they had to do so in the next month.

With the extension for the next eight months, borrowers and loan servicers now have a longer runway to prepare for when repayment starts.

"The extension of the payment pauses provides much needed relief to borrowers during the pandemic in the short-term," says Sarah Sattelmeyer, director of the Pew Charitable Trust's Student Borrower Success project. The big question now is what happens next.

Many hope that temporary pandemic relief for borrowers will open the door to more permanent loan forgiveness. But it's unclear to what extent the Biden administration would do that. On Jan. 8, David Kamin, the incoming deputy director of Biden's National Economic Council, repeated Biden's support of Congress canceling up to $10,000 in federal student loans per borrower in response to the pandemic. But many Democrats want him to go further.

In September, Democratic Sens. Elizabeth Warren and Chuck Schumer unveiled a plan calling for the next president to cancel up to $50,000 of outstanding federal student loans per borrower. Biden has yet to signal interest in this plan. In his campaign proposal, he outlined a number of changes to paying back loans, including canceling $10,000 in debt for students who work in national or community service.

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