U.S. Education Secretary Miguel Cardona provided a bit of good news on Friday afternoon. The Education Department has elected to extend its moratorium on student loan payments through January 31, 2022. Initially, the moratorium was expected to end on September 30, 2021.
“The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency,” Cardona said.
“As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for a restart and ensure a smooth pathway back to repayment.”
The decision to extend the student loan moratorium is driven by an economy and job market that is still recovering during the COVID-19 pandemic. Recently, the Pew Charitable Trust looked into just how difficult it would be for many people to repay their student loans in their current financial state.
“With the payment moratorium on federal student loans set to expire Sept. 30, two-thirds (67%) of borrowers responding to a survey this spring said it would be difficult for them to afford payments if they resumed the following month,” Travis Plunkett, Regan Fitzgerald and Lexi West of the Pew Charitable Trust wrote in a recent report.