The Biden administration has extended the federal student loan forbearance period until May 1, 2022, as the omicron variant of the coronavirus rapidly spreads across the nation, according to the White House. This gives borrowers 90 additional days during which payments are suspended and interest doesn't accrue on their student loan debt.
"Now, while our jobs recovery is one of the strongest ever … 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," President Joe Biden said in a Wednesday statement.
While Biden has been reluctant to delay student loan repayment past the original deadline of Feb. 1, his administration reversed its stance after repeated calls from prominent Democrats who "strongly" urged the president to act.
One group of progressives — Senate Majority Chuck Schumer, Sen. Elizabeth Warren and Rep. Ayanna Pressley — has been particularly outspoken in pressuring the president to extend the student loan payment pause.
"Extending the pause will help millions of Americans make ends meet, especially as we overcome the Omicron variant," the Democratic lawmakers wrote in a statement applauding the extension.
Over the next several months, the Department of Education will "continue working with borrowers to ensure they have the support they need to transition smoothly back into repayment and advance economic stability for their own households and for our nation," Biden said.
Borrowers can utilize this zero-interest forbearance period to pay down the principal balance of their loans, allowing them to save money on interest and pay off their debt faster. Still, a recent survey found that 89% of fully employed student loan borrowers aren't financially prepared to resume payments.
If you're among this vast majority, consider reducing your monthly student loan payments by refinancing while interest rates are at record lows. Keep in mind that refinancing your federal loans into a private student loan will make you ineligible for government benefits like administrative forbearance, income-driven repayment and select student loan forgiveness programs.
You can compare student loan refinance offers across multiple private lenders at once on Credible for free and without impacting your credit score. That way, you can find the lowest rate possible for your financial situation.
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