Biden administration extends pause on student loan payments until May 1; debt owed by more than 380,000 Arkansans
President Joe Biden announced Wednesday that his administration is extending the pause in federal student loan repayments as the omicron variant hangs over the national economy.
Arkansans and borrowers nationwide were due to see the student loan moratorium end Jan. 31, but Biden said his administration would extend the pause until May 1, highlighting the coronavirus pandemic.
The move is a change of course for the Biden administration, which had previously said the previous extension would be its last.
“We know millions of student borrowers are still dealing with the effects of the pandemic and need more time before payments can resume,” Biden said in a statement Wednesday.
The Biden administration has come under pressure from congressional Democrats to extend the moratorium. The US Department of Education says the moratorium will help 41 million borrowers save $5 billion each month.
More than 380,000 borrowers in Arkansas hold about $12.8 billion in federal student loan debt, according to June figures from the Department of Education.
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About 100,000 of those state borrowers each have more than $40,000 in debt, according to September figures from the department.
The extension was good news for North Little Rock resident Dionne Mitchell, who works as a middle school teacher in central Arkansas.
Mitchell, who is a single mother, graduated from the University of Central Arkansas and previously attended Jackson State University in Mississippi.
She used the money that would have gone to her student loans to help pay for groceries and clothes, she said.
“Because my child is still growing,” she said, referring to her young son. Mitchell says she’s good at saving money, but the size of her college debt still makes her feel uneasy.
Against the backdrop of Wednesday’s announcement is a broader debate about canceling student loan debt.
Micah Wallace, executive chairman of the Arkansas Young Democrats, expressed support for extending the moratorium, but said canceling student debt was much better than temporary relief.
Democratic Sen. Greg Leding of Fayetteville said he understands why older generations might initially be reluctant to write off student debt, but the idea has merit.
Young people are delaying major life decisions, such as having a child or buying a home, because of student debt, he said.
As for the extension of the payment break, Leding said he was “pleased” to see the announcement.
Families can see high costs at the end of the calendar year due to heating and vacation expenses, he said. Additionally, the money families save will be funneled back into the economy, he said.
“It’s going to bring a lot of relief,” he said of the extension.
The extension comes as Arkansas families this month received what may be their last monthly payment under the federal child tax credit program, a Democrat-backed effort to expand assistance. federal government and give parents up to $300 per child on a monthly basis.
This will be the last monthly payment for parents unless further action is taken.
Biden’s sprawling social and environmental legislation includes an expansion of the child tax credit, but the legislation has faced opposition from Senate Republicans and U.S. Sen. Joe Manchin, DW.V., and it seems little likely to be adopted in its present form.
Sen. Tom Cotton, R-Ark., criticized the extension of the student loan moratorium on social media on Wednesday, saying not requiring student loan repayment “means that the majority of Americans who have paid their debt or don’t ‘have ever taken loans will be stuck with’ a tab.
Education Secretary Miguel Cardona argued the extension will bring “critical relief” to borrowers facing financial hardship due to the pandemic. It will also allow the Biden administration to assess omicron’s impact on borrowers, he said in a statement.
“We are committed to not only ensuring a smooth return of refunds, but also to increasing accountability and strengthening customer service,” he said in the statement.
Federal student loan repayments were originally suspended under then-President Donald Trump in March 2020.
Prior to Wednesday, an extension to the payment break had received support from high-profile Democrats like Majority Leader Chuck Schumer. He applauded the announcement’s extension on Wednesday, but said in a tweet that Biden needed to cancel student debt “to help close the racial wealth gap and give relief to so many people.”
Schumer and fellow Democrats, U.S. Senator Elizabeth Warren and Rep. Ayanna Pressley, both of Massachusetts, released a joint statement saying the payment pause has allowed borrowers to pay off other debts and save for emergencies .
“Extending the pause will help millions of Americans make ends meet, especially as we overcome the Omicron variant,” lawmakers said in the statement.
Information for this article was provided by The Associated Press.
Gallery: White House press secretary speaks during a press briefing