Citing continued economic fallout from the Covid-19 pandemic, President Joe Biden used his authority to pause required payments on student loans for millions of Americans across the country.
The move is seen as welcomed relief for those carrying student loan debt. This action applies only to federally held and backed student loans; loans from private companies or third parties are not subject to this moratorium.
This student loan pause has been in effect since the initial impact of the pandemic hit American shores in March of 2020. It was previously scheduled to expire on January 31, 2022 before President Biden extended the deadline. During the pause, most loan programs will not collect continued interest; the collection of owed money will resume after the pause expires.
“We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,” President Joe Biden said in a statement last week.
Along with the pause in conventional student loan collection, the order also puts a pause on garnishment of wages, social security, and tax refunds.
More than one third of all young adults in the United States carry a balance on loans taken out for their education. There are more than fifty million Americans that owe money; President Biden’s order will help to relieve the financial burden on many households.