If You Heard a Collective Sigh of Relief Yesterday...

🎓💰 It's because the Biden administration is planning to once again extend the moratorium on federal student loan payments, this time through the end of August, per multiple sources; an official announcement is expected later today.

• The news comes as the current pause on payments, initially issued in March 2020 at the onset of the pandemic, was set to expire on May 1.
• It’ll be the sixth time the White House has extended the moratorium – twice under Trump and four times under Biden.
• Borrowers with private loans, which make up less than 10% of outstanding student debt, haven’t been eligible for the pause in payments – though some lenders and servicers offered flexibility to those who requested a suspension.

🇺🇸 The big picture: Over 40 million Americans owe a combined ~$1.6 trillion in federal student debt, a sum larger than credit-card or auto debt.

• Student-loan borrowers had been spared $195 billion in federal payments during the pandemic, per a Fed report published last month, which found nearly 80% made no payments during that time.
• Prior to the pandemic, more than 7 million borrowers had defaulted on their loans, meaning they were at least 270 days late on payments.

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