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Biden extends break on federally backed student loan payments until September

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As part of one of his first executive orders, President Joe Biden ordered the Department of Education to extend student loan relief by extending a pause on interest and principal payments for direct federal loans until at least September 30, 2021.

US borrowers currently owe more than $ 1.5 trillion in federal student loans.

At the start of the coronavirus pandemic in the United States, borrowers got a break on their March 2020 loan repayments under the CARES Act, with interest set at 0% and delinquent loan collections put on hold. waiting. Former President Donald Trump and later former Education Secretary Betsy DeVos extended it, causing it to expire on January 31.

Shortly after Biden was declared the winner of the 2020 presidential election, speculation grew as to whether the new administration would extend the payment hiatus. Many in the camp of the new president have not only asked for relief from the payment of student loans, but have also called for pleaded for debt cancellation.

On December 17, Reps Ayanna Pressley (D-MA), Ilhan Omar (D-MN), Maxine Waters (D-CA) and Alma Adams (D-NC) presented a resolution this would write off up to $ 50,000 in federally guaranteed student loan debt for US borrowers.

WASHINGTON, DC – JANUARY 20: US President Joe Biden prepares to sign a series of executive orders at the Resolute Desk in the Oval Office just hours after his inauguration on January 20, 2021 in Washington, DC. Biden became the 46th President of the United States earlier today during the ceremony at the United States Capitol. (Photo by Chip Somodevilla / Getty Images)

This legislation was in concert with a resolution created by Senate Majority Leader Chuck Schumer (D-NY), Senator Elizabeth Warren (D-MA). However, in December, Biden informed Karen Tumulty of the Washington post that it was “unlikely” that he would write off $ 50,000 in debt for borrowers. “Well, I think that’s pretty questionable. I’m not sure of it. I would be unlikely to do so, ”he said.

Education-related spending is expected to make up a large portion of Biden’s first 100 days in office. In a speech to the nation on Thursday night, Biden set out his $ 1.9 trillion in economic stimulus plans, which include $ 170 billion allocated to help schools across the country reopen safely.

In a press release issued by the White House, the new administration drew attention to the dire situation facing many debt holders in the United States.

“Too many Americans struggle to afford basic necessities and provide for their families. They shouldn’t have to choose between paying off their student loans and putting food on the table. “

Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.

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