WASHINGTON, D.C. — People preparing to resume student loan payments can wait another month.
Secretary of Education Betsy DeVos announced Friday that the moratorium on student loan payments has been extended through Jan. 31, 2021.
Borrowers have not had to make payments since March but had the option to continue paying down their principal amounts. The relief was set to expire on Dec. 31.
“The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been impacted,” DeVos said in a statement. “The added time also allows Congress to do its job and determine what measures it believes are necessary and appropriate. The Congress, not the Executive Branch, is in charge of student loan policy.”
DeVos also extended the pause of interest accrual, as well as the suspension of collections on defaulted loans, the statement said. Non-payments will continue to count toward the number of payments required under an income-driven repayment plan.
DeVos paused federal student loan payments in March, and Congress passed legislation two weeks later in a $2 trillion economic stimulus package.
The original deadline was Sept. 30, but President Donald Trump then extended forgiveness through December, The Washington Post reported.
In Friday’s statement, DeVos instructed employers to continue to halt wage garnishments for borrowers with defaulted federal student loans. Any defaulted borrowers who continue to have their wages garnished will receive refunds.
The suspension and interest waiver applies only to federally held loans, CNN reported. That covers roughly 85% of all federal student loans, including Direct federal loans and PLUS loans, which parents can take out on behalf of their children.
“We are glad that Secretary DeVos has heeded this call,” Alexis Goldstein, senior policy analyst at the progressive Americans for Financial Reform, told the Post. “But we still need a long-term solution. We look forward to seeing the incoming Biden administration extend the federal student loan suspension even further, ensure all federal student loan borrowers are covered, and provide crucial relief to millions by canceling federal student debt via executive action.”
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