President Joe Biden has issued an executive order extending a pause on federal student loan payments.
The order, which covers the vast majority of all federal student loans, will allow borrowers to defer payments without penalty and reset interest rates to zero.
President Joe Biden on Wednesday issued an executive order to extend a pause on federal student loan payments through at least the end of September 2021.
A pause on payments first went into effect as the coronavirus pandemic began in March 2020, and was extended in December to expire on Jan. 31. Borrowers were able to defer payments without penalty and reset interest rates to zero.
Biden advisers had made it clear ahead of the inauguration that the incoming president intended to issue such an order immediately. The order covers the vast majority of federal student loans, but excludes some federally guaranteed loans that are held by a private lender.
“On Day 1, the president-elect will direct the Department of Education to extend the existing pause on student-loan payments and interest for millions of Americans with federal student loans,” David Kamin, deputy director of the National Economic Council in the Biden administration, previously told reporters.
Kamin also told reporters at the time that Biden would like Congress to work to cancel $10,000 in debt for all federal student loan borrowers, but did not provide details on other actions the president could take or would like to see. Other leaders within the Democratic Party, including Sen. Elizabeth Warren (D-Mass.), have pushed for canceling $50,000 in debt for all student loan borrowers through executive order.
It is unclear how Biden’s pick for education secretary, Miguel Cardona, feels about student debt cancellation and related issues. Cardona, who has spent his career working in and around K-12 schools, most recently served as the education commissioner for the state of Connecticut.
Donald Trump’s secretary of education, Betsy DeVos, wrote a letter to congressional leaders before she left office, urging them not to cancel student loans or expand free college.
“I hope you also reject misguided calls to make college ‘free’ and require the two-thirds of Americans who didn’t take on student debt or who responsibly paid off their student loans to pay for the loans of those who have not done the same,” DeVos wrote in a letter addressed to then-Senate Majority Leader Mitch McConnell. “Across-the-board forgiveness of college debts is not only unfair to most Americans, it is also the most regressive of policy proposals – rewarding the wealthiest sector of our labor force at the expense of the poorest.”