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• Borrowers have been allowed to pause their monthly bills without interest on their debt since March 2020
• The spike in coronavirus cases due to Omicron variant has added to the uncertainty about the economy
The Biden administration announced on Wednesday to extend the payment pause for federal student loan borrowing until May 1 amid spread of Omicron variant.
“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 statement.
Borrowers have been allowed to pause their monthly bills without interest on their debt since March 2020 due to the coronavirus pandemic. The plan was scheduled to expire at the end of the next month, i.e. January 31.
According to a research, almost all borrowers have accepted the relief.
Many Democrats have been in the favour of extending the payment pause for the 42 million Americans with student debt.
The spike in coronavirus cases due to Omicron variant has added to the uncertainty about the economy.
Almost 90 percent of student loan borrowers who are fully employed by now are not financially secure enough to restart payments, shows a study.
In the U.S., outstanding student loan debt has surpassed $1.7 trillion which is more than credit card and auto debt. The average monthly bill is around $400 a month.
Picture Credits: Reuters