The Education Department said Friday it will extend the suspension of federal student loan payments through Jan. 31, 2022, marking the fourth time the agency has given borrowers breathing room amid the pandemic. The department says it will be the final extension offered to borrowers.

The moratorium was set to expire on Sept. 30, but Congressional Democrats had urged the Biden administration to push back the date as the public health crisis has left many Americans struggling to regain their financial footing. The Education Department had also pressed the White House for a final extension to help borrowers smoothly transition back into repayment, according to people familiar with the matter who spoke on the condition of anonymity because they were not authorized to speak publicly.

Those efforts paid off.

“As today’s jobs numbers show, we have the tools that will allow us to beat COVID-19 and keep our economy recovering at a record rate,” President Biden said Friday in a statement. “But we know there is more work to do and the road will still belong for many people — especially for the one in six adults and one in three young people who have federal student loans.”

The final extension said Education Secretary Miguel Cardona, “will give students and borrowers the time they need to plan for a restart and ensure a smooth pathway back to repayment.”

The Education Department said it will begin notifying borrowers about the final extension in the coming days, and provide resources about how to plan for the resumption of payments as the end of the moratorium approaches.

All borrowers with student loans from the Education Department will see their payments automatically suspended until Jan. 31 without penalty or accrual of interest. Each month until then will still count toward loan forgiveness for borrowers in public-service jobs. It will also count toward student loan rehabilitation, a federal program that erases a default from a person’s credit report after nine consecutive payments.

Collections on defaulted, federally held loans will still be halted, and any borrower with defaulted federal loans whose wages are being garnished will receive a refund. However, the directive still excludes millions of borrowers whose federal loans are held by private companies or universities.

All told, 41 million Americans will benefit from the continued moratorium, according to the department.

News of the final extension was met with mixed reactions from lawmakers. Congressional Republicans blasted the administration for giving borrowers more time they don’t need.

“Students and families faced immense challenges last year, but the American economy continues to recover and there is no rational excuse for continued extensions of non-payment on student loans,” said Sen. Richard Burr (R-N.C.), the top Republican on the Senate Health, Education, Labor, and Pensions Committee. “As vaccination rates continue to increase, Americans are returning to work and returning to their normal daily lives. Student loan repayments should resume as well.”

Virginia Foxx (R-N.C.), the top Republican on the House Education Committee, called Cardona’s move to extend the moratorium “nothing less than a dereliction of duty.” She and Burr have pressed the Education Department for its plan to resume loan repayment for the last several months, saying any further delay of restarting the system would only cost taxpayers more money.

Congressional Democrats, meanwhile, applauded the department’s decision, but some renewed calls for Biden to wipe away some of the $1.5 trillion in federal loans held by millions of Americans.

Senate Majority Leader Charles E. Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.), and Rep. Ayanna Pressley (D-Mass.), who has been at the forefront of the cancellation movement, issued a joint release urging Biden to take further steps.

“We’re pleased the Biden administration has heeded our call to extend the pause on federally-held student loan payments, providing an enormous relief to millions of borrowers facing a disastrous financial cliff,” the lawmakers said. “While this temporary relief is welcome, it doesn’t go far enough.”

The trio, who have long pressed Biden to cancel up to $50,000 per borrower, argue that cancellation is “one of the most significant actions that President Biden can take right now to build a more just economy and address racial inequity.”

Although Biden has endorsed the cancellation of $10,000, he has expressed reluctance at upping the amount and questioned his authority in the matter. The Justice Department is reviewing Biden’s authority to take action, but House Speaker Nancy Pelosi (D-Calif.) said only Congress has the power. Still, more than 60 Democratic members of the House and Senate have urged Biden to grant widespread debt relief.

Student advocates took a similar position Friday, with many praising the extended moratorium and insisting the White House must act on debt forgiveness. Others implored the Education Department to use the added time to ensure borrowers don’t fall through the cracks when payments resume.

The recent exit of two student loan servicers — Pennsylvania Higher Education Assistance Agency and New Hampshire Higher Education Loan Corporation — means millions of student loan accounts must be transferred to other contractors in the coming months. The department is also negotiating contract extensions and updating requirements for some student aid programs.

“There are too many moving parts to successfully start federal student loan repayment,” said Persis Yu, a staff attorney, and director of the National Consumer Law Center’s Student Loan Borrower Assistance Project. “While the payment suspension is still in place, the President must take meaningful steps to improve the student loan system.”

The Bureau of Labor Statistics released stronger-than-expected July employment numbers Friday morning, providing the latest reading on the post-pandemic economic recovery. The data was parsed by investors and economists alike for their implications for Federal Reserve policy.

U.S. employers added a seasonally adjusted 943,000 workers in July, while economists, on average, had expected a gain of 862,500 nonfarm jobs. It was a modest rise from June’s also stronger-than-expected increase of 938,000, which was revised up from 850,000 on Friday.

There was considerable disagreement among the economists surveyed by FactSet. Their estimates for July jobs growth ranged from around 400,000 to as high as 1.5 million.

    The unemployment rate ticked down to 5.4%, from 5.9% in June, with 8.7 million workers still unemployed in July. That rate bottomed out at 3.5% in February 2020, before the pandemic pushed it as high as 14.8% that April. The consensus estimate was for a 5.7% unemployment rate.

    Stocks and sectors that are more cyclical and geared to the performance of the overall economy rose after the report, while more growth-oriented groups fell. The Dow Jones Industrial Average closed up 0.4% on Friday, at a record high, while the small-cap Russell 2000 added 0.5%. The tech-heavy Nasdaq Composite, meanwhile, fell 0.4%.

    More than just reading on the health of the economy, Friday’s jobs numbers could influence Fed policy. Officials have already started to discuss easing their foot off the monetary stimulus gas pedal. The Federal Open Market Committee’s first move would be to slow the pace of the central bank’s asset purchases, currently running at $80 billion of U.S. Treasuries and $40 billion of mortgage-backed securities a month. Policymakers, including Fed Chairman Jerome Powell and Fed governor Lael Brainard, have said they need to see “sufficient further progress” in reducing unemployment to begin tapering bond purchases.

    “The level of employment remains the obstacle to tapering and Fed hawks have yet to find a path around that obstacle,” Tim Duy, University of Oregon economics professor and chief U.S. economist at SGH Macro Advisors, wrote to clients before Friday’s report.

    Overall, Friday’s jobs report and the strong upward revision to the June numbers should give investors and the market confidence in the continued progress of the U.S. recovery. But the result isn’t so strong as to raise the fear that the economy is overheating, and likely won’t push the Fed to move any faster than it already was. August hiring could be affected by the Delta variant-fueled rise in Covid-19 cases, and officials will surely want to see those numbers first before taking any action.

    “This reinforces our view that the labor market is on solid footing, and will be the main driver of economic growth (via consumption),” wrote Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. “It also keeps the Fed on track to taper bond purchases towards the end of 2021/beginning of 2022, which should put upward pressure on long-term interest rates.”

    Government-bond yields rose on Friday following the report, but not so much as to suggest a major change in policy expectations. The yield on the 3-year U.S. Treasury note ticked up 2.4 basis points—or hundredths of a percentage point—to 0.410%. The 10-year Treasury note yield jumped 8.3 basis points, to 1.307%. And the 30-year Treasury bond’s yield gained 8.4 basis points, to 1.952%. Treasury yields remain ultralow, but those are relatively large moves for the bond market.

    Payroll growth in recent months has seemingly been constrained more by the supply of workers, rather than demand. U.S. job postings are high, but due to a combination of Covid-19 concerns, lack of summer child care options, and increased unemployment benefits, some workers have been hesitant to return to the labor market. The labor-force participation rate was 61.7% in July, about where it has been for most of the past year. That compares with a 63.3% participation rate in February 2020.

    Employers had to pay up to attract workers last month. Average hourly earnings were up a seasonally adjusted 0.4% from June to July, and almost 4% higher than a year ago. Forecasts had been for a 0.3% month-over-month rise and a 3.8% year-over-year increase. The Consumer Price Index has been posting annual gains in the 4% to 5% range in the past few months. That means that—all else equal—consumers’ purchasing power has declined because prices have increased faster than wages. Government stimulus, ample savings, and pent-up demand have kept consumer spending high, nonetheless.

    CPI data for July will be released on Wednesday and July retail sales figures are out on Aug. 17.

    Economists and investors will also focus on where jobs are still missing, relative to their pre-Covid levels. Although employment in many sectors has fully recovered, pandemic-sensitive industries remain millions of jobs short. Covid-19 and resulting government restrictions or caution from consumers are responsible for that. It isn’t something that can be fixed by monetary policy.

    Leisure and hospitality was the strongest source of hiring in July, responsible for 380,000 new jobs. That category includes workers at hotels, restaurants, casinos, theaters, and other forms of entertainment and recreation. It will be interesting to see if there will be any meaningful Delta impact on those jobs in August.

    Local government education contributed another 220,700 jobs, professional and business services employment grew by 60,000, transportation and warehousing by 49,700, and healthcare and social assistance by 46,800. Building material and garden supply stores showed the largest decline in July employment, falling 33,800, but there may be some seasonal factors at play there.

    Wednesday’s private-sector employment report from payrolls processor ADP showed 330,000 jobs were added last month, versus the 653,000 average forecasts. That was a big miss, but ADP numbers haven’t always provided a reliable prediction of the government’s broader jobs numbers—especially during Covid-19.

    Fed policymakers and economists will gather in Jackson Hole, Wyoming for their annual policy symposium from Aug. 26 to 28. The FOMC’s next meeting is scheduled for Sept. 21-22.