Biden extends student loan freeze

For the third time, the president has extended a pause on student loan payback that started in March 2020. Debt payments and interest rates will remain frozen until Aug. 31. Last week, dozens of Democrats urged President Joe Biden to extend the freeze because of rising inflation and supply chain problems. The Biden administration has already canceled more than $17 billion in federal student loans for borrowers working in the public sector, students defrauded by for-profit colleges, and people who are permanently disabled.

What does the situation look like now? The Committee for a Responsible Federal Budget found that the pause has saved an average of $5,500 per borrower in interest — not including the benefit to public sector workers whose countdown for debt forgiveness did not stop with the freeze. The committee also found that the pause costs the federal government about $4 billion per month. The Education Department reported 43 million students owe a combined $1.6 trillion to the federal government. Biden has urged Congress to pass legislation canceling $10,000 per borrower.

Dig deeper: Read Esther Eaton’s report in Schooled about the Education Department’s crackdown on false advertising by for-profit universities.