The Department of Education announced the freeze on student loan payments, interest, and collections will continue through Aug. 31, 2022. The Department said this pause will allow borrowers to make an easier transition back into repayment, an indication that at some point the pause may expire. Until then, the extra time is being advertised as a way to prevent delinquency and default.
“This additional extension will allow borrowers to gain more financial security as the economy continues to improve and as the nation continues to recover from the COVID-19 pandemic,” Education Secretary Miguel Cardona said in a statement.
All borrowers who are delinquent or in default will also be given a “fresh start” and allowed to begin repayments in good standing.
“I know folks were hit hard by this pandemic, and though we’ve come a long way in the last year we’re still recovering from the economic crisis it caused,” President Biden said in a recorded statement.
The pause began during the Trump administration soon after the COVID-19 pandemic hit. The Biden administration continued it, and it has continued to receive bipartisan support. But the measure is not good enough for those calling for student loan cancellation.
“I encourage @POTUS to take action on long-term solutions for those struggling with student loan debt, including an extension of the current repayment pause and a cancellation of up to $50,000 in student debt,” Senator Cory Booker (D-NJ) tweeted.
President Biden has continually expressed support for Congressional legislation canceling $10,000 in debt, but he has not acted on calls to unilaterally cancel $50,000.
Borrowers will need to check the status of their loan before repayments begin. According to the Federal Student Aid office, auto-debit payments will not restart automatically for most borrowers, and they’ll need to opt-in. In addition, the monthly payment amounts could have been changed based on the remaining balance and the amount of time until the full loan repayment is due.
More information about student loan repayments, auto-debits, and income based repayment plans can be found at studentaid.gov
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