Student loan pause extended until Jan. 31, 2022
WASHINGTON - The U.S. Department of Education announced on Friday a final extension of its pause on student loan payments until Jan. 31, 2022.
"The Department believes this additional time and a definitive end date will allow borrowers to plan for the resumption of payments and reduce the risk of delinquency and defaults after restart," according to a department news release.
"The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency," said U.S. Secretary of Education Miguel Cardona.
"As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment. It is the Department’s priority to support students and borrowers during this transition and ensure they have the resources they need to access affordable, high quality higher education," Cardona said.
RELATED: Two student loan servicers end federal contracts, deserting 10M borrowers — are you impacted?
The previous student loan payment pause was set to expire in October.
The interest-free federal student loan payment pause, known as a forbearance, was extended three times after it initially went into effect in March 2020 as a way to help reduce the financial blow many borrowers experienced as a result of the COVID-19 pandemic.
In addition to the extension, the department announced it is working to make higher education for students more affordable as well as providing improved loan services.
The efforts include approving $1.5 billion in borrower defense claims, which will include extending full relief to approved claims, approving new claims and reinstating "$1.3 billion in loan discharges for 41,000 borrowers who received a total and permanent disability discharge and protecting another 190,000 from potential loan reinstatement," according to the department.
RELATED: CDC orders new 60-day eviction moratorium amid COVID-19 surge
Meanwhile, Sen. Elizabeth Warren, D-Mass., Senate Majority Leader Chuck Schumer, D-N.Y., and others have called on President Joe Biden to extend the repayment moratorium until next spring and to give borrowers a break by erasing at least $50,000 in student loan debt altogether.
Biden has said he supports canceling up to $10,000 of student debt per person but has indicated that he wants Congress to enact legislation to that effect, rather than forgiving it via executive action.
House Speaker Nancy Pelosi said on July 28 that Biden can't unilaterally wipe away student loan debt, as some progressives have urged him to do, and even questioned the fairness of a debt forgiveness policy.
"People think that the president of the United States has the power for debt forgiveness," Pelosi said at a Capitol news conference. "He does not. He can postpone. He can delay, but he does not have that power."
RELATED: US schools reopen amid COVID-19 surge with masks optional for many
"That has to be an act of Congress," Pelosi said.
Pelosi acknowledged some policy concerns about giving some borrowers a break, while previous borrowers had to faithfully pay off their loans. She also questioned whether it was fair for families that didn't go to college to have their tax dollars forgive the debts of someone who did.
"You may not be happy about that," Pelosi said.
The Federal Reserve estimates that Americans owe more than $1.7 trillion in student loan debt.
FOX Business contributed to this report. This story was reported out of Los Angeles.