Biden administration extends student loan hiatus amid Omicron variant
President Joe Biden announced on Wednesday that the pandemic relief on student loan repayments will be extended until May 1.
The student loan hiatus was originally scheduled to expire on January 31. The extension was a response to the COVID-19 pandemic and has been extended several times by former President Donald Trump and now Biden, through the CARES law enacted in March 2020.
The last extension, made from August to January, was the “last” according to the Biden administration.
However, due to the rise in the transmissible variant of Omicron and its potential threats, concerns contributed to the decision to extend by 90 days as a way to bring relief.
“The extension will allow the administration to assess the impacts of the Omicron variant on student borrowers and provide more time for borrowers to plan for resumption of payments and reduce the risk of default and default after restart” , according to the US Department of Education. .
With collective student debt of $ 1.37 trillion, the extension is expected to help 41 million borrowers and those who are in arrears.
âAs we prepare for the return to repayment in May, we will continue to provide tools and support to borrowers so they can complete a repayment plan that is appropriate for their financial situation, such as a repayment plan based on income, âthe education secretary said. Miguel Cardona said in a press release.
What this means for Cal Poly graduates
As of March 2020, the interest rate on federal student loans has been frozen at 0%. According to Cal Poly’s financial aid office, the extension does not apply to those currently attending Cal Poly.
âHowever, for our recent June graduates, that means their first payments, which would normally have started this month, shouldn’t have any additional payments until May, giving them more time to settle into the workforce. and prepare to start payments or have moved into graduate school and able to defer payments, âsaid Gerrie Hatten, executive director of the Financial Aid Bureau, in an email to Mustang News.
The extension will also apply to parents who help with loans.
Amid the Omicron wave, Biden is urging student loan borrowers to do their part.
âTake full advantage of the resources of the Ministry of Education to help you prepare for the resumption of payments; explore options for reducing your payments with income-based repayment plans; explore the cancellation of public service loans; and make sure you’re vaccinated and boosted when you’re eligible, âBiden said.