The temporary suspension of student loan repayments has been extended until January 31, 2022 for the last time, the education ministry said on Friday. Refunds were originally scheduled to resume on October 1, 2021.

This is the fourth time the repayment break has been extended since it was first enacted in March 2020 by the Coronavirus Aid, Relief and Economic Security Act. During the hiatus, all student loan payments were suspended, each borrower had their interest rate set at zero percent, and collections on delinquent loans were suspended.

The department said that with the additional time and a definitive end date, borrowers will be able to schedule payments to resume, reducing the risk of default and default after the restart. He also said he would work to facilitate a smooth transition for borrowers to repay, which includes improvements to student loan servicing.

“The payment break has been a lifeline that has allowed millions of Americans to focus on their families, health and finances instead of student loans during the national emergency,” the secretary said. ‘Education Miguel Cardona in a press release. “As our country’s economy continues to recover from a deep hole, this latest extension will give students and borrowers the time they need to plan for the restart and ensure a smooth return to repayment.”

Recent survey data has shown that the extension for borrowers is likely necessary. An analysis from Pew Charitable Trusts found that two-thirds of respondents to a survey last spring said it would be difficult for them to pay if they picked up a month after the date they responded to the survey. Another survey, conducted by Student Debt Crisis, showed that 90 percent of the nearly 24,000 borrowers surveyed said they were not ready to resume their payments in October.

Advocates and Democratic lawmakers had called on the Biden administration to extend the hiatus for weeks, with many saying a rush to resume loan payments would be a recipe for disaster. The announcement was met with praise by many, although some with caveats. Meanwhile, Republican lawmakers criticized the decision.

Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, said while the organization welcomes the move, the department needs to start preparing for the restart immediately.

“The transition of millions of borrowers to repayment cannot be done with the flick of a switch and may even require phased implementation,” said Draeger. “The delays cannot continue indefinitely, and we urge the Secretary of Education to use his authority in this national emergency to streamline reimbursement processes as much as possible, on the most favorable terms possible. . “

House of Commons Education and Labor Committee Chairman Bobby Scott, a Democrat from Virginia, also applauded the decision, saying the extended hiatus “will help continue the momentum of our economic recovery and give borrowers student loans for the time they need to strengthen their financial security before they restart. “

Other Democratic lawmakers praised the move, but still pleaded with the administration to do more to tackle the student debt crisis. Senate Majority Leader Chuck Schumer of New York, Senator Elizabeth Warren of Massachusetts and Representative Ayanna Pressley of Massachusetts – all of whom have voiced the need to extend the recess – have said President Biden must still resort to the executive action to fight widespread student debt. cancelation.

“We are delighted that the Biden administration has responded to our call to extend the hiatus on federally-held student loan repayments, offering enormous relief to millions of borrowers facing a dire financial cliff,” said lawmakers in a joint statement. “While this temporary relief is welcome, it does not go far enough. The cancellation of student debt is one of the most important steps President Biden can take right now to build a fairer economy and fight against it. racial inequalities. “

The student debt crisis also continued its calls for Biden to write off student debt, urging him to take action before repayments resumed in January.

“While today’s announcement provides some financial security for borrowers and their families as they recover from job losses, reduced hours or business closures, the reality is that the president can do much more, ”said Natalia Abrams, Executive Director of Student Debt Crisis.

Not all Democrats believe Biden can unilaterally write off student debt, however. House Speaker Nancy Pelosi, a Democrat from California, said last month that Biden could defer or delay student loan debt, but the power to write it off rests with Congress.

Some ask Biden to do more, others believe the administration has already done enough. Rep. Virginia Foxx, a Republican from North Carolina and a leading member of the House of Commons Education and Labor Committee, said the administration should have worked with Congress to responsibly restore the portfolio of student loans in repayment by October 1.

“This extension is doing borrowers across the country a disservice, and our children will pay the ultimate price for this irresponsible delay,” Foxx said.

Senator Richard Burr, Republican of North Carolina and a leading member of the Senate Committee on Health, Education, Work and Pensions, highlighted the award in his criticism of the decision, saying that “on the Based on the cost of previous loan breaks, this extension will cost around $ 20 billion to subsidize over the next four months, in addition to the $ 76 billion already spent on loan breaks over the past year and a half. “

“Students and families faced immense challenges over the past year, but the US economy continues to recover and there is no rational excuse for the continued extensions of student loan defaults,” Burr said. “Today’s action by the Biden administration actively works against the interests of students, borrowers and taxpayers.”