DeVos extends student loan pause through January

The Trump administration on Friday granted an extra month of student loan relief to the 41 million Americans who have been benefiting from a freeze on monthly payments and interest that was set to expire at the end of the year.

That relief was set to expire on Dec. 31 but will now end on Jan. 31. The last-minute extension averts what could have been a potentially chaotic resumption of payments just weeks before President-elect Joe Biden takes office.

About 41 million federal student loan borrowers have had interest suspended on their loans since March 13, beginning with the CARES Act and continued under Trump’s executive action over the summer. Roughly 33 million of those borrowers have had their payments paused, and the Education Department has stopped seeking to collect from the 8 million other borrowers who were in default.

Democrats, labor unions and consumer advocacy groups called on the Trump administration in recent weeks to further extend all of those benefits for borrowers in the midst of a worsening pandemic and as negotiations over more coronavirus aid remained stalled. But the Education Department and White House were mum on whether they would grant another reprieve for student loan borrowers in the last weeks of Donald Trump's presidency.

POLITICO reported earlier this week that the department had ordered federal student loan servicers to hold off on billing borrowers in an early sign the government was not going to start collected payments on Jan. 1.

Even as Education Secretary Betsy DeVos took executive action to extend the benefits, she said it should be up to Congress, not the executive branch, to make policy decisions about federal student loans.

“The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been impacted,” DeVos said in a statement. “The added time also allows Congress to do its job and determine what measures it believes are necessary and appropriate. The Congress, not the Executive Branch, is in charge of student loan policy.”

Biden has not committed to any specific executive action on student loans, but he is widely expected to further continue in some form the same freeze on monthly payments and interest the Trump administration has now twice extended through executive action.

Congress has debated for months whether to further extend the student loan relief, but Democrats and Republicans have disagreed over how and whether to do so.

The coronavirus relief bill House Democrats passed in May would freeze student loan payments until Sept. 30 of next year and keep the interest rate at 0 percent for the same period or even longer, unless the unemployment rate improves.

A $908 billion bipartisan proposal a group of centrist senators unveiled this week included approximately $4 billion for continuing some form of student loan relief, potentially through March of next year, though the details have not been hammered out. But Senate Republicans have been cooler to the idea.

The latest coronavirus relief plan from Senate Majority Leader Mitch McConnell does not include an extension of the student loan benefits.

Biden is also facing pressure from progressive Democrats to go further and use executive action to outright cancel hundreds of billions of dollars worth of outstanding student loan debt.

Sens. Elizabeth Warren (D-Mass.) and Chuck Schumer on Friday published an op-ed again urging Biden to forgive large swaths of student loan debt, which they argue would stimulate the economy and narrow the racial wealth gap in the United States.

Biden on the campaign trail endorsed the idea of canceling $10,000 worth of debt per borrower as a pandemic relief measure. But he has not committed to doing so through executive action as opposed to asking Congress to clear legislation to that end.