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President Joe Biden highlighted the need for drug price strategy changes Tuesday, in Washington, during the 2022 State of the Union address. (Photo: White House)

Financial Planning > College Planning > Student Loan Debt

Biden Set to Extend Student Loan Pause

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The U.S. government is expected to extend a pause on student loan repayments through Aug. 31, an official familiar with the plans said.

The announcement is due Wednesday, the official added. The administration has grappled with ending the pause on loan payments as the economy’s recovery from pandemic lows continues — bringing with it inflation that has outpaced wage gains.

Domestic Policy Adviser Susan Rice advocated for the pause, and has been pushing within the administration to provide student loan relief, the official said. The coming announcement was reported earlier by The Hill.

The move builds on the announcement last year of an overhaul to the Public Service Loan Forgiveness Program, including to expand eligibility for loan forgiveness.

Still, some advocates who have been pushing for student debt to be canceled say temporary relief doesn’t go far enough.

“We recognize that extending the payment pause is important to borrowers struggling to shoulder the harm caused by the pandemic, economic shocks, and inflation,” said Natalia Abrams, president and founder of the Student Debt Crisis Center. “However, President Biden’s piecemeal, short-term approach is not enough to meet these challenging times.”

Others are calling for the administration to revise the complicated system of student loans.

Four months is not enough time to fix a system that has been broken for decades, Abby Shafroth, interim director of the National Consumer Law Center’s Student Loan Borrower Assistance Project, said in a statement.

“There is widespread agreement that the current student loan system is badly broken, that the student loan safety net has failed, and that millions of borrowers have been repaying loans that should have already been discharged,” Shafroth said.

(Photo: Bloomberg)

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