CAPITAL RUNDOWN: Student loan moratorium extended addition 90 days, what that means for borrowers

Capital Rundown

LANSING, Mich. (WLNS) — With the Biden administration’s put pause on student loan repayments until May 1, the White House says the extended pause on federal student loan repayments and interest impacts an estimated 41 million borrowers.

“We know some student loan borrowers are still coping with the pandemic and need some time before resuming payments,” said White House Jen Psaki. “It was really clear that student loan borrowers were not ready to pay their student loan bills if they came due next month.”

Mike Pierce of the Student Borrower Protection Center says the student debt crisis existed before the pandemic, which is now coupled with economic uncertainty.

“Inflation has caused food prices to go up, rent to go up, gas to go up, car payments to go up, and the thought of taking away that financial flexibility, that little measure of security was too much for people to bare,” said Pierce.

The extension was announced Wednesday and was started as part of COVID-19 relief under the previous administration. Student debt advocates are pressing to make it permanent.

“If you can afford to pause student loan payments over and over again, you can afford to cancel it,” said Derrick Johnson, President of the NAACP.

The Student Borrower Protection Center says student debt has impacted communities of color at far higher rates and spans all ages.

Mike Pierce says people need to know their options.

“Every single person with a student loan that’s been paused has a right under federal law to tie their payment to their income. If you’re recently unemployed or your spouse has lost your job, their job, or if you’ve had a big drop in wages because of the pandemic, you might have a right to make a payment that is as low as zero dollars per month,” continued Pierce.

The Department of Education says it’s ready to work with people to prepare for a transition back into repayment.

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