Personal Finance

Next stimulus package may extend student loan payment pause until May

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Key Points
  • Bipartisan legislation circulated on Wednesday calls for extending the payment pause for student loan borrowers by another three months.
  • This additional relief would mean borrowers wouldn't have to start making payments again until May 2021.
  • The forbearance for borrowers has been repeatedly extended amid the crisis.
It appears that lawmakers on both sides of the aisle are in favor of extending the student loan forbearance.
Al Drago/Bloomberg via Getty Images

Student loan borrowers may not have to worry about their monthly bills until at least May of next year.

In a summary of bipartisan legislation circulated on Wednesday that could become the next stimulus package, lawmakers included a provision to continue student loan forbearance through April 30, 2021.

The payment pause has been repeatedly extended amid the pandemic.

The U.S. Department of Education first said in March that the 42 million Americans with federal student loans would be off the hook from their monthly bills until September. Then President Donald Trump signed an executive order in August that continued the interest-free reprieve until the end of December.

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Most recently, U.S. Department of Education Secretary Betsy DeVos announced that borrowers wouldn't have to resume payments until February.

This additional break would give them yet another three months.

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Americans were already struggling with their student loans before the pandemic hit and drove up unemployment, with more than 1 in 4 borrowers in delinquency or default. Outstanding student loan debt in the U.S. has spiraled to more than $1.7 trillion. The average student loan bill is around $400 a month.

The vast majority, or around 90%, of borrowers have taken advantage of the government's option to pause their payments during the pandemic, data shows.

In a recent Pew survey, 6 in 10 borrowers said it would be difficult for them to start making payments again in the coming month. 

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