The U.S. Department of Education announced Wednesday that it will extend the student loan payment moratorium through August 31.
The payment pause has, to this point, been renewed six times since March 2020 in response to the economic crisis caused by the COVID-19 pandemic. The last extension was scheduled to end on May 1.
Almost all borrowers have taken advantage of the moratorium at some point; approximately 1 percent have continued making payments throughout the pandemic, experts told CNBC.
The extension comes amid continued criticism from fellow Democrats who claim President Joe Biden is not doing enough to alleviate the student debt crisis. While campaigning for the presidency, Biden vowed to forgive at least $10,000 in student debt for all borrowers but has yet to fulfill the promise.
Some argue that repeated moratorium extensions create a false hope that will ultimately create more problems once the pause is lifted.
“What’s a borrower to believe or plan for anymore when the government keeps changing its mind?” Scott Buchanan, executive director of the Student Loan Servicing Alliance, told CNBC. “When the inevitable resumption does finally happen, millions of borrowers will likely miss it and go delinquent because of the false expectations the government is now setting.”
