Biden Aims to Extend Student Loan Freeze

What You Need to Know

President Joe Biden signed over a dozen executive orders on his first day in office, including one that extends the student loan freeze. Before the executive action, the pause on student loan payments was set to expire at the end of January under an order from the Trump administration.

According to the Federal Reserve Bank of New York, federal student loan debt neared $1.6 trillion by the end of last year. The student loan freeze, extended through September 30 under Biden’s new order, aims to help ease the additional financial burdens from COVID-19. The new executive order also includes a freeze on student loan interest accrual and collections on defaulted loans.

How Will this Affect Student Loans?

For degree-holders currently repaying U.S. Department of Education (ED) -owned federal student loans, the student loan freeze relieves these individuals of making monthly payments toward their student debt. Loan interest rates remain set at 0% through the end of September. This freeze does not include private student loans.

Even students currently attending school benefit from Biden’s extended student loan freeze. Typically, direct unsubsidized loans accrue interest while students pursue a higher education degree. However, under the pause, students enrolled in a college program also benefit from 0% loan interest rates. Students unsure whether their loans qualify can contact their loan servicer for more information.

The student loan freeze also applies to students within the six-month grace period post-graduation. If a student’s grace period expires anytime during the coronavirus relief period (which began on March 13, 2020), their payments and interest rates freeze through September 30.

After that date, unless President Biden takes further action, payment collections and interest accrual will resume.

Students should prepare a repayment plan now to smooth the transition back into monthly payments come fall.

What About Cancelling Student Loan Debt?



During his campaign trail, Biden often spoke about his plans to address the growing student loan debt crisis. Extending the student loan freeze on his first day as president serves as a solid first step in easing this financial burden. While President Biden’s plans to further handle student loan forgiveness remain uncertain, there are several possibilities.

Previously, Biden expressed his support to cancel up to $10,000 of student loan debt for all borrowers on ED-owned federal loans. Another proposal involves granting free undergraduate tuition for qualifying individuals at two- and four-year public institutions. Private institutions may qualify if they are historically black colleges and universities and minority serving institutions. In addition, a family’s income would need to be less than $125,000 per year for students to qualify.

Biden also proposed a new student repayment plan. Under this plan, anyone earning below $25,000 annually would not need to repay undergraduate federal student loans. The plan would also limit federal student loan repayments to 5% of discretionary income for individuals who earn above $25,000 per year. If an individual still holds student debt after making payments on a repayment plan for 20 years, then the government would waive the remaining debt.

Other democratic leaders, such as Senator Elizabeth Warren and Senate Majority Leader Chuck Schumer, have called for more extreme measures. This includes the immediate cancellation of student loan debt of up to $50,000.

Until further action toward cancelling student loan debt occurs, students and degree-holders alike can enjoy a student loan freeze extended through the end of September.

Portrait of Laurie Dupnock

Laurie Dupnock

Laurie is a copy editor for Affordable Colleges Online. She has also written higher education articles for three years, starting at Binghamton University where she earned her MA in English with a concentration in creative writing. Along with Affordable Colleges Online, her writing has been featured on The Mighty and on her blog BetterByTheBeat.com, where she writes health-related content to educate and empower the chronic illness community. In her free time, Laurie enjoys working on her first YA novel and exploring New York City, where she lives.

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