Payment freeze is extended for student loans

President Joe Biden extended a freeze on federal student-loan repayments until at least the end of September, keeping in place a pandemic measure that’s reduced costs for tens of millions of borrowers.

Biden asked the Education Department to consider the move soon after his swearing in, according to a statement from his transition team that outlined a barrage of Day 1 measures.

The freeze took effect last March as part of the main coronavirus relief plan passed by Congress, and it twice was extended by former President Donald Trump — most recently until the end of January.

It has saved Americans about $7 billion a month, calculations by the Federal Reserve Bank of New York show.

Interest charges also have been suspended, so balances don’t increase during the repayment freeze, along with involuntary collections like wage garnishment for borrowers who are in default.

Biden ran on a promise of forgiving $10,000 in student debt per borrower — which would add up to about $370 billion. Some progressives have pushed him to go further.

New Senate Majority Leader Chuck Schumer and Sen. Elizabeth Warren had urged him to forgive $50,000 per borrower right after taking office, arguing it would deliver an immediate stimulus to the economy.

Biden has indicated he’s opposed to enacting that policy via executive order. Critics of debt forgiveness say it would channel aid to relatively well-off college graduates at a time when low-paid service workers, mostly without degrees, have been hit hardest.

Biden’s $1.9 trillion stimulus proposal, outlined last week, doesn’t include the loan forgiveness plan, though a Biden administration official told reporters he still supports the policy.