Biden administration to extend student loan break until 2022

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The Biden administration has decided to extend the pause in paying federal student loans until January 31, 2022.

The student loan moratorium, which has suspended payments, interest, and fees on most federal student loans from March 2020, expires on September 30, 2021, after several renewals. Advocates for student loan borrowers and legislators in Congress were increasingly concerned about the ability of borrowers to resume payments, as well as the ability of credit services to cope with the transition in light of the uneven economic recovery and turmoil caused by the recent abrupt departure of the two main student loan service providers.

The administration described the decision as a “definitive” extension of student loan benefits, which means that student loan borrowers must schedule repayments to resume by February 2022.

“The pause in payments has become a lifeline, allowing millions of Americans to focus on their families, health and finances instead of student loans during a national emergency,” Education Minister Miguel Cardona said in a statement Friday. “As our nation’s economy continues to recover from a deep pit, this final extension will give students and borrowers the time they need to plan a restart and ensure a smooth return to repayment.”

Although the full directive or memorandum has not yet been released, all previous extensions of the student loan moratorium are subject to the months of suspended disbursements counting towards student loan forgiveness programs, including the public service loan forgiveness program, as required under the CARES Act. … The Ministry of Education has promised to provide borrowers with additional information in the coming days.

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