Biden extends the pause in student loan payments. Here’s what to know

President Joe Biden has directed the Department of Education to extend the suspension of federal student loan payments just days before the moratorium was scheduled to expire.

“Too many Americans are struggling to pay for basic necessities and to provide for their families,” the department said in a statement Wednesday. “They should not be forced to choose between paying their student loans and putting food on the table.”

Congress passed a coronavirus relief package in March 2020 that suspended student loan payments through September. The benefit was extended by former President Donald Trump’s administration through Jan. 31.

On the campaign trail, Biden said he supported canceling $10,000 of federal student loan debt per person. Incoming director of the National Economic Council Brian Deese said the Biden administration still supports forgiving up to $10,000 per borrower, The Washington Post reported.

Biden has proposed an income-based repayment plan in which Americans who make more than $25,000 a year would put 5% of their discretionary income toward their loans and after 20 years, their loans would be forgiven. People who make less than $25,000 a year wouldn’t owe any payments on their loans.

Biden’s plan also proposes two years of free community college and making public colleges and universities free for families with incomes under $125,000.

Biden has faced pressure from other Democratic lawmakers to pass more student debt relief.

Senate Majority Leader Chuck Schumer introduced legislation with Democratic Sen. Elizabeth Warren of Massachusetts, calling on Biden to forgive $50,000 in student debt per person on his first day in office.

“We have come to the conclusion that President Biden can undo this debt, can forgive $50,000 of debt the first day he becomes president,” Schumer said in December, CNBC reported. “You don’t need Congress; All you need is the flick of a pen.”

House Democrats led by Maxine Waters of California, Ayanna Pressley of Massachusetts, Ilhan Omar of Minnesota and Alma Adams of North Carolina introduced similar legislation in December.

Last year, federal student loan debt neared $1.6 trillion, according to the Federal Reserve Bank of New York. More than 40 million Americans have student loan debt, according to Politico.

This story was originally published January 21, 2021 at 11:24 AM with the headline "Biden extends the pause in student loan payments. Here’s what to know."