Today, the U.S. Department of Education (Department) announced an extension of the pause on student loan repayment, interest, and collections through August 31, 2022. While the economy continues to improve and COVID cases continue to decline, President Biden has made clear the continuing need to respond to the pandemic and its economic consequences, as well as to allow for the responsible phase-down of pandemic relief.
The extension will provide additional time for borrowers to plan for the resumption of payments, reducing the risk of delinquency and defaults after restart. During the extension, the Department will continue to assess the financial impacts of the pandemic on student loan borrowers and to prepare to transition borrowers smoothly back into repayment. This includes allowing all borrowers with paused loans to receive a “fresh start” on repayment by eliminating the impact of delinquency and default and allowing them to reenter repayment in good standing. The Department will also continue to provide loan relief, including to borrowers who have been defrauded by their institutions and those eligible for relief through the Public Service Loan Forgiveness program. FSA will establish new partnerships to ensure that borrowers working in public service are automatically credited with progress toward forgiveness, eliminating paperwork that prevents many borrowers from getting help. FSA will also continue to transfer loans to servicers committed to working under new, stronger accountability rules.
“The Department of Education is committed to ensuring that student loan borrowers have a smooth transition back to repayment,” said U.S. Secretary of Education Miguel Cardona. “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. It remains a top priority for the Biden-Harris Administration to support students, families, and borrowers – especially those disproportionately impacted by the pandemic. During the pause, we will continue our preparations to give borrowers a fresh start and to ensure that all borrowers have access to repayment plans that meet their financial situations and needs.”
More information about the payment pause and supports for borrowers can be found at StudentAid.gov.
Today’s action is one in a series of steps the Biden-Harris Administration has taken to support students and borrowers, make an education beyond high school more affordable, and improve student loan servicing. In just over one year, the Department has provided over $17 billion in targeted loan relief to over 700,000 borrowers. Actions within that include:
- Revamping the Public Service Loan Forgiveness program in October, which has already allowed the Department to identify more than 100,000 borrowers eligible for $6.4 billion in loan relief. As part of that effort, the Department implemented a Limited PSLF Waiver to count all prior payments made by student borrowers toward PSLF, regardless of the loan program. Borrowers who are working in public service but have not yet applied for PSLF should do so before October 31, 2022, and can find out more at StudentAid.gov/PSLF.
- Providing $7.8 billion in relief for more than 400,000 borrowers who have a total and permanent disability.
- Approving $2 billion in borrower defense claims to approximately 107,000 borrowers, including extending full relief to approved claims and approving new types of claims.
- Providing $1.26 billion in closed school discharges to 107,000 borrowers who attended the now-defunct ITT Technical Institute.
- Helping 30,000 small business owners with student loans seeking help from the Paycheck Protection Program.