Student loan repayment pause extended to May 2022

A pause on federal student loan repayment, interest, and collections has been extended through May 1, 2022, the Biden administration announced today.

The extension is to “allow the Administration to assess the impacts of the Omicron variant on student borrowers and provide additional time for borrowers to plan for the resumption of payments,” the Department of Education said.

In a statement from the White House, President Biden encouraged student loan borrowers to “do their part as well” and use the additional time to ensure their contact information is up to date and to consider enrolling in electronic debit and income-driven repayment plans to support a smooth transition to repayment.

The pause on student loan payments will help 41 million borrowers save $5 billion per month, the Dept. of Education said.

According to the recent TIAA survey of student loan borrowers, 95% of nonprofit and public sector employees said they would have had some difficulty keeping up with payments when CARES Act relief legislation had expired.

And even those workers who might have been able to resume making payments would have had difficulties doing so using savings or paychecks. According to the TIAA survey, 11% said they’d have to instead reduce or stop their retirement plan contributions to do so or try to get help from family or friends.

Had the pause not been extended from its expiration date of Feb. 1, 2022, many student loan borrowers would have struggled. According to a recent survey by Savi and the Student Debt Crisis Center, “Among fully-employed student loan borrowers, 89% say they are not financially secure enough to resume payments on February 1. One-in-five say (21%) they will never be financially secure enough to resume payments again.”

And, according to that survey, those who could seek loan forgiveness due to being employed in the public service or nonprofit sector weren’t even aware of changes the Dept. of Education has made to its forgiveness programto make it easier to receive forgiveness.

Borrowers who are working in public service but have not yet applied for PSLF should do so before October 31, 2022, the Dept. of Education says, and can find out more at StudentAid.gov/PSLF.

The Dept. of Education noted the following actions taken to help student loan borrowers:

• It implemented a Limited Public Service Loan Forgiveness (PSLF) Waiver to count all prior payments made by student borrowers toward PSLF, regardless of the loan program.
• Provided $7.0 billion in relief for 401,000 borrowers who have a total and permanent disability.
• Approved $1.5 billion in borrower defense claims, including extending full relief to approved claims and approving new types of claims.
• Provided $1.26 billion in closed school discharges to 107,000 borrowers who attended the now-defunct ITT Technical Institute.
• Helped 30,000 small business owners with student loans seeking help from the Paycheck Protection Program.