Biden administration considers extending payment pause for student loan borrowers

KEY POINTS

• The Biden administration is considering extending the payment pause and interest waiver for most federal student loan borrowers once again.
• The pause is currently scheduled to expire next month.

President Joe Biden addresses graduates of South Carolina State University during their commencement ceremony on Dec. 17, 2021.

Mandel Ngan | AFP | Getty Images

The Biden administration is considering extending the payment pause and interest waiver for most federal student loan borrowers once again.

"Since day one of the Biden Administration, we've been hard at work delivering meaningful relief to student loan borrowers," a spokesman for the U.S. Department of Education told CNBC on Tuesday.

"That started with an extension of the pause on federal student loan repayment until Jan. 31, 2022," the spokesman said. "Later this week, we will be announcing whether to extend the pause further."

More from Personal Finance:
10 million children will fall into poverty when enhanced child tax credit ends
SALT deduction relief may be in peril as Build Back Better stalls
Backdoor Roth 401(k) and IRA rules for the wealthy survive — for now

Since March 2020, borrowers have been given the option to press the pause button on their monthly bills without interest accruing on their debt. Almost all borrowers have accepted the relief, research shows.

The pause is currently scheduled to expire at the end of next month.

Yet Democrats and advocates have been pressuring President Joe Biden to give the 42 million Americans with student debt more time. Recent concerns about the new omicron variant have added urgency to those discussions.

Outstanding student loan debt in the U.S. has surpassed $1.7 trillion and burdens Americans more than credit card and auto debt. Around a third of borrowers are in delinquency or default. The average monthly payment is around $400 a month.

Recent polling of student loan borrowers found that around 90% are still not financially secure enough to resume their payments.

This is breaking news. Please check back for updates.

How would restarting student loan payments impact you and your family? If you're willing to speak for a story, please email me at [e-mail]