Payments on federal student loans have been paused for two years, and the Biden administration appears to be considering extending the pause beyond May.

Transcript

RACHEL MARTIN, HOST:

For two years now, payments and interest on federal student loans have been put on pause because of the pandemic. They are supposed to restart in May. But the U.S. Department of Education recently sent an email that has thrown that deadline into doubt. We are joined by NPR education correspondent Cory Turner to help us sort through all this. Hey, Cory.

CORY TURNER, BYLINE: Hey, Rachel.

MARTIN: OK, so this is about an email?

TURNER: Yeah.

MARTIN: Explain what's going on here because this affects a lot of people, right? - 40 million Americans with federal student loans.

TURNER: It does. Yeah, the internal email was sent by Ed Department officials to representatives of the government's big student loan servicers.

MARTIN: OK.

TURNER: So, Rachel, these are the companies that actually deal with borrowers and manage their payments. And the email said, interestingly, don't reach out to borrowers about the fact that they are supposed to start repaying their loans in May. Don't send any heads-up, no billing statements, no reminders. The email was obtained by NPR and first reported by Politico. Now, it did not say explicitly that this payment moratorium would be extended. And when I reached out, neither the Ed Department nor the White House would confirm an extension. But it is not a stretch to say this email means an extension is possible, if not likely because the department has a legal obligation to communicate with borrowers multiple times before payments can restart, and it is simply running out of time.

MARTIN: OK, so people who pay on these loans have had a two-year reprieve. Why would the administration think about extending that?

TURNER: So I think there is lingering concern about restarting loan payments with inflation as high as it is. But it also seems pretty clear, Rachel, the White House is really grappling with what to do about student loans overall because remember, in President Biden's own party, there are many who are pretty frustrated with him because he campaigned on canceling at least $10,000 in debt per borrower, something he hasn't done. So liberal Democrats in Congress, including Senators Elizabeth Warren and Majority Leader Chuck Schumer - they've been pushing Biden to cancel student debt.

A few days before this Ed Department email went out, the White House chief of staff, Ron Klain, appeared on the podcast "Pod Save America"." And Klain promised clarity. He said Biden would either make a decision once and for all about cancellation before this moratorium is supposed to end in May, or, Klain said, Biden will extend the pause again. It's also worth remembering this payment moratorium has already been extended several times by both the Biden and the Trump administration. So ultimately, you know, from the department's point of view, this email to servicers is really the department's way of trying not to confuse borrowers any more than they already are.

MARTIN: Except if you're a borrower listening to our conversation (laughter), aren't you more confused at this point? Even though our job is to create clarity, yes.

TURNER: (Laughter) Yeah. So look. My overriding advice to borrowers is for the moment, they still need to assume that they're going to have to start repaying their loans in May...

MARTIN: OK.

TURNER: ...Until there is something official otherwise saying so. The challenge, we need to remember, for Biden here, though, is that the May return to repayment is really pretty close to November's midterm elections. And that puts the White House in a real bind. You know, Republicans are pushing back now, saying they supported the pause at the beginning of the pandemic, but hiring is booming. Not collecting on these loans has cost the government a lot of money. But it also doesn't take a political genius to know, Rachel, you know, for Biden and Democrats, there is very little upside in asking tens of millions of borrowers to restart their student loan payments right before they go to the polls.

MARTIN: NPR's Cory Turner. Thank you, Cory.

TURNER: You're welcome, Rachel. Transcript provided by NPR, Copyright NPR.