President Joe Biden on Wednesday announced that his administration is extending a pause on federal student loan payments as the omicron variant looms over the nation's economy.
Arkansans and borrowers nationwide were set to see the student loan moratorium end Jan. 31, but Biden said his administration would lengthen the pause through May 1, pointing to the coronavirus pandemic.
The move is a change in course for the Biden administration, which previously said the previous extension would be the final one.
"We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments," Biden said in a statement Wednesday.
The Biden administration has faced pressure from congressional Democrats to extend the moratorium. The U.S. Department of Education says the moratorium will help 41 million loan borrowers save $5 billion every month.
More than 380,000 borrowers in Arkansas hold about $12.8 billion in federal student loan debt, according to June figures from the Education Department.
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About 100,000 of those state borrowers each have more than $40,000 in that debt, according to September figures from the department.
The extension was welcome news to North Little Rock resident Dionne Mitchell, who works as a middle school teacher in Central Arkansas.
Mitchell, who is a single mother, graduated from the University of Central Arkansas and previously attended Jackson State University in Mississippi.
She used the money that would have gone to her student loans to help pay for groceries and clothes, she said.
"Because my kid is still growing," she said, referring to her young son. Mitchell says she's good at saving money, but the size of her student loan debt still makes her uncomfortable.
In the backdrop of Wednesday's announcement is a larger debate over canceling student loan debt.
Micah Wallace, executive president of the Young Democrats of Arkansas, expressed support for extension of the moratorium, but said canceling student debt is much better than temporary relief.
Democratic state Sen. Greg Leding of Fayetteville said he understands why older generations might initially be resistant to canceling student loan debt, but there's merit to the idea.
Younger people are putting off major life decisions, like having a child or purchasing a home, because of their student debt obligations, he said.
As for the extension of the payment pause, Leding said he was "thrilled" to see the announcement.
Families can see high costs at the end of the calendar year because of heating and holiday expenses, he said. Plus, the money saved by families will go back into the economy, he said.
"This is going to provide a lot of relief," he said of the extension.
The extension comes as Arkansas families this month received what could be their last monthly payment under the federal child tax credit program, a Democratic-backed effort to expand federal aid and give parents up to $300 per child on a monthly basis.
It will be the last monthly payment for parents unless further action is taken.
Biden's sprawling social and environmental legislation includes an extension of the child tax credit, but the legislation has run into opposition from Senate Republicans and U.S. Sen. Joe Manchin, D-W.V., and it appears unlikely to pass in its current form.
Sen. Tom Cotton, R-Ark., slammed the extension of the student loan moratorium on social media Wednesday, saying that not requiring student loan payments "means the majority of Americans who paid their debt or never took loans will get stuck with" a tab.
Education Secretary Miguel Cardona argued that the extension will give "critical relief" to borrowers dealing with financial difficulties because of the pandemic. It will also allow the Biden administration to gauge omicron's impact on borrowers, he said in a statement.
"We are committed to not only ensuring a smooth return to repayment, but also increasing accountability and stronger customer service," he said in the statement.
Federal student loan payments were initially suspended under then-President Donald Trump in March 2020.
Before Wednesday, an extension on the payment pause had received support from high-profile Democrats like Majority Leader Chuck Schumer. He applauded the announcement extension Wednesday, but said in a tweet that Biden needs to cancel student debt "to help close the racial wealth gap and provide relief to so many."
Schumer and fellow Democrats U.S. Sen. Elizabeth Warren and Rep. Ayanna Pressley, both of Massachusetts, issued a joint statement arguing that the payment pause has allowed borrowers to pay down other debt and save for emergencies.
"Extending the pause will help millions of Americans make ends meet, especially as we overcome the Omicron variant," the lawmakers said in the statement.
Information for this article was contributed by The Associated Press.
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