AILSA CHANG, HOST:

President Biden announced today that he is extending the two-year freeze on federal student loan payments, interest and collections until August 31. The Education Department also said it would offer a, quote, "fresh start" for the roughly 7 million borrowers who are in default right now.

To talk more about that, we are joined now by the U.S. Secretary of Education, Miguel Cardona. Welcome.

MIGUEL CARDONA: Hi. Thank you for having me.

CHANG: Well, thank you for being with us again. All right. I just want to start with this fresh start for borrowers who are currently in default. What does that mean exactly, fresh start?

CARDONA: Yeah. We know so many of our borrowers have fallen on hard times, even before the pandemic. They've maybe had delinquency in payments, or they've had to default on their loans. And what we want to do is make sure they have a fresh start. We want to make sure that their loans are put in good standing again, level the playing field. You know, let's start fresh. How can we support you? How can we help you be successful with your loan repayment? So they're starting with a fresh start.

CHANG: OK. But they're not getting any of their loans forgiven - right? - just to be clear.

CARDONA: No. The fresh start program is really just putting them back in good standing despite whatever challenges they had prior.

CHANG: OK. And are you confident that you can get all of that done and processed in just four and a half months?

CARDONA: You know, restarting 41 million loans...

CHANG: Yeah.

CARDONA: ...Is something that's never been done. But you know what? Two years ago, we would never have thought we can reopen schools after shutting them down after a pandemic. We can do it. We put in different strategies in place. We really want to make it more student-centered and more borrower-centered here.

So we work really hard at FSA. We have Richard Cordray over there, James Kvaal in the higher ed space - just trying to change the systems to make it more user-friendly and be more supportive of our borrowers who are really - you know, they had a lot of challenges during the pandemic. And we think this pause will help 41 million Americans breathe a little bit easier.

CHANG: OK. Well, that said, you know, with this new extension to August 31, we're now talking about 2 1/2 years total where no interest has accrued on student loans, federal student loans, which you would think is exactly when borrowers would want to be paying off their loans. But I understand that your data shows only about half a million borrowers have been doing that. Do you worry that the mixed messages this administration is sending about possible debt cancellation further down the road is maybe causing people not to pay down their loans?

CARDONA: No. I really think it's - you know, Americans had a tough time during the pandemic. You know, what we're finding is people are starting to, you know, pay their mortgages, or child care expenses are coming back because many folks are returning back to work. So what we're hearing and what we're seeing is that, you know, this pandemic - things are getting better, right? The economy is getting better - 7.9 million jobs over the last year, greatest year of job growth on record. But Americans are still struggling right now. And we do believe that this pause will help them. And with regard to, you know, the messaging around broader loan forgiveness, while we continue those conversations, I do think this pause is something that Americans needed during this pandemic.

CHANG: Let me ask you about loan forgiveness and on this issue of struggling Americans. I mean, some Democratic lawmakers have been lukewarm about this particular extension because they were looking for greater loan forgiveness. Is there a chance that loan forgiveness will be a possibility after August 31?

CARDONA: Right. I'm not really connecting these two things, you know, in terms of what we're trying to do for our borrowers. While the conversations around loan forgiveness continue to happen, we did feel that this pause was needed also. And we definitely want to make sure we're not just also limiting it to the overall broad loan forgiveness. There's so much that has been done since President Biden took office to make it a little bit easier for borrowers, you know? So we're going to continue to put our students first, provide loan forgiveness where we can and keep our Americans supported throughout this process.

CHANG: All right. That is the U.S. Secretary of Education, Miguel Cardona. Thank you very much for joining us again.

CARDONA: Thank you. Transcript provided by NPR, Copyright NPR.