The Biden administration has approved another extension of the student loan moratorium.
Payments on federal student loans will be paused through May 1, 2022, under the new extension. Furthermore, interest rates will remain at zero percent and debt collection will be suspended. This extension means that the current measures will not expire on January 31 as many had feared.
"We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments," said President Joe Biden in a statement.
The new policy will affect more than 36 million Americans.
The Omicron variant of COVID-19 that has swept through the U.S. has lent new urgency to the question of whether the moratorium would be extended. Administration officials initially said they expected the January extension to be the last. But even as the economy improves, there are concerns that borrowers are not ready to start payments again. Once the moratorium ends, borrowers who were already behind on payments could have wages and benefits taken away as part of debt collection efforts.
The extension of the loan moratorium comes as the decision of whether to erase large swaths of student debt altogether is still on the table.
Some Democrats are pushing for mass forgiveness of debt. But Biden has questioned whether he has the authority for that kind of mass cancellation, and legal scholars differ on that. Earlier this year, Biden asked the Education and Justice departments to study the issue. Officials have said that work is still underway.
Biden has previously said he supports canceling up to $10,000 in student debt, but he has argued it should be done by Congress.
Meanwhile, in October, the administration relaxed the rules for the student loan forgiveness program it has in place already, ditching some of the toughest requirements around the program that was launched in 2007 to steer more college graduates into public service.
Biden said that he was also asking all student loan borrowers to "do their part as well." He said they should take full advantage of Education Department resources as they prepare for payments to resume, look at options to lower payments through income-based repayment plans, explore public service loan forgiveness, and make sure you are vaccinated and boosted when eligible."
The Associated Press contributed to this report.
Update 12/22/21 12:55 PM ET - This story has been updated with additional information.
