The action applies to more than 43 million Americans who owe a combined $1.6 trillion in student debt held by the federal government, according to the latest data from the Education Department.
Nearly 37 million borrowers have saved about $195 billion from the moratorium through April 2022, according to a report released last month by the Federal Reserve Bank of New York.
The same report also found that student loan borrowers who didn’t benefit from the extended moratorium had 33% higher rates of delinquency on other debt.
That includes more than 7 million borrowers who have defaulted on student loans, meaning they are at least 270 days late on payments.
Borrowers will not be asked to make payments until after Aug. 31, and interest rates are expected to remain at 0% during that period.
Sen. Patty Murray said more time is needed to help Americans prepare for repayment and to rethink the government’s existing system for repaying student debt.
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