White House to extend student loan pause through August

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White House to extend student loan pause through August
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PAUSE EXTENDED: The Biden administration 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. MORE:

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.

“It is ruining lives and holding people back,” she said in a statement last month. “Borrowers are struggling with rising costs, struggling to get their feet back under them after public health and economic crises, and struggling with a broken student loan system - and all this is felt especially hard by borrowers of color.”

In March, the St. Louis Federal Reserve Bank warned that resuming loan payments could place a heavy burden on borrowers who faced financial hardship during the pandemic. It said the impact would be hardest on Black families, who are more likely to rely on student loans to pay for college.

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