Extension gives Department of Education time to tackle “Too Big to Fail” student loan servicing

WASHINGTON— The Biden administration announced plans to extend the pause on payment and interest for most federal student loan borrowers for an additional 90 days, through May 1, 2022. The student loan payment moratorium was previously set to expire at the end of January.

A recent poll showed fewer than nearly half of borrowers were “Not at all Confident” in their ability to make student loan payments when they come due. The moratorium will also allow the Department of Education time to make long-overdue changes to student loan servicing, and ensure that student loan borrowers don’t continue to suffer from the lack of accountability at student loan servicing giants.

In response, Alexis Goldstein, director of financial policy at Open Markets Institute, issued the following statement:

“The extension of the student loan moratorium is especially welcome at a time when fewer and fewer student loan servicers are responsible for overseeing millions of loan repayments, further concentrating the Too Big To Fail problem in student loan servicing.

“Student loan debt has a chilling effect on the ability of debt-burdened workers to navigate the job market after school—it increases the power of already-too-powerful corporations in highly consolidated industries and furthers the power imbalances between labor and management.

“This moratorium extension will provide critical relief, especially as cases of the COVID-19 variant Omicron are rising and there is ongoing economic precarity.”

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