Biden to direct Department of Education to extend student loan payment freeze

[DonViejo]

BY KATE SMITH

JANUARY 20, 2021 / 8:09 AM / CBS NEWS

In one of his first actions as president, Joe Biden on Wednesday will ask the Department of Education to extend the nearly year long pause on student loan payments through September 30, delivering on the incoming administration's campaign promise to prioritize and begin addressing the nearly $1.6 trillion debt crisis.

Since March, all federal student loan payments have been suspended as part of the federal government's COVID-19 response. An extension of the grace period was included in early drafts of December's stimulus package, but was cut in final negotiations. Prior to Mr. Biden's Executive Order, slated to be signed in the Oval Office Wednesday afternoon, payments were scheduled to resume at the end of January.

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Student loan debt has been a looming financial issue since before the pandemic, but widespread coronavirus-related job losses and pay cuts, especially among millennials, have exacerbated the issue. Last year federal student loan debt reached an all-time high, nearing $1.6 trillion among more than 40 million Americans, according to the Federal Reserve Bank of New York. On average, student loan borrowers owe between $200 and $299 every month, an amount that for many is simply untenable; about one in every five borrowers is in default, according to the U.S. Department of Education.

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