Today, the U.S. Department of Education 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.
“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: