President Biden will issue an executive order asking the Education Department to extend pandemic relief for about 41 million federal student loan borrowers through Sept. 30.
In March 2020, borrowers were granted a reprieve on their loan payments — interest was set to 0% and collections of defaulted federal student loans were paused. Congress initiated this relief in the CARES Act. Both President Donald Trump and, later, Education Secretary Betsy DeVos, extended it.
Before Biden's executive order, expected later today, the relief was set to expire on Jan. 31.
The back and forth on deadlines has been a challenge for borrowers. Research from Pew conducted in August and September found that, among borrowers who said the relief applied to them, about 40% did not know when their loan payments were set to resume. That research also found that borrowers are struggling financially due to the pandemic: Almost 6 in 10 borrowers with paused payments reported to Pew that it would be difficult to begin making their payments if they had to do so in the next month.
With the extension for the next eight months, borrowers and loan servicers now have a longer runway to prepare for when repayment starts.