In March 2020, the CARES Act implemented a freeze on federal student loan payments—an action that helped about 43 million borrowers during the pandemic. The freeze was then extended five times and was given a “final” deadline of Jan. 31, 2022.
Plot twist: Biden administration to extend student loan payment freeze until May 1BY Sydney LakeDecember 22, 2021, 6:07 PM
Now, the Biden administration will extend the payment freeze through May 1, 2022.
“We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,” President Joe Biden said in a Wednesday statement. “Given these considerations, today my administration is extending the pause on federal student loan repayments for an additional 90 days—through May 1, 2022—as we manage the ongoing pandemic and further strengthen our economic recovery.”
This is a complete change of tune for the Biden administration from just last week, when White House press secretary Jen Psaki said that there wouldn’t be any additional extensions on student loan forbearance, and that payments would resume on Feb. 1, 2022. The Biden administration since August had been referring to the fifth extension as the final deadline.
“We’re still assessing the impact of the Omicron variant, but a smooth transition back into repayment is a high priority for the administration,” Psaki had said during a press conference. “The Department of Education is already communicating with borrowers to help them to prepare for return to repayment on February 1.”
There’s been rising concern, however, in the past few weeks over the effect that the Omicron variant will have on the economy as a whole. Senate Majority Leader Chuck Schumer used this point as leverage during a Dec. 6 press conference when he called on the Biden administration to “continue that pause with the advent of Omicron, the continuation of COVID.”
“The Omicron variant is a scary reminder that the pandemic is still a serious concern, and Americans cannot be crushed by student debt as they shoulder this health and economic crisis,” Natalia Abrams, president of the Student Debt Crisis Center, said in a statement on Tuesday. “The Biden administration must recognize the urgency of the situation and [use] the tools available to the president to offer relief.”
While the Biden administration is extending the forbearance period by another 90 days, the president warns borrowers need to “do their part, as well.”
“Take full advantage of the Department of Education’s resources to help you prepare for payments to resume; look at options to lower your payments through income-based repayment plans; explore public service loan forgiveness; and make sure you are vaccinated and boosted when eligible,” he said in a statement.
Fortune also compiled a to-do list to help borrowers prepare for repayment. The list was compiled before the extension announcement was made, but it still has valuable information and input from student loan experts.