Student loan payments extended again
Published 5:24 pm Friday, April 29, 2022
For millions of Americans with student debt, the pause the federal government placed on loan repayment was supposed to come to an end in May. However, the federal government has once again extended the pause.
This is the sixth extension of the pause.
Earlier this month the U.S. Department of Education (ED) extended the student loan payment pause through Aug. 31. The pause includes a suspension of loan payments, a 0% interest rate and stopped collections on defaulted loans. This policy does not apply to private student loans.
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Repayments were paused close to two years ago following the COVID-19 pandemic outbreaks.
“The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health and finances instead of student loans during the national emergency,” said U.S. Secretary of Education Miguel Cardona. “As our nation’s economy continues to recover from a deep hole, this extension gives students and borrowers the time they need to plan for the restart and ensure a smooth pathway back to repayment.”
President Joe Biden has said that he is in support of canceling $10,000 in loans while other Democrats are seeking a $50,000 loan reduction.
A little more than a year in office, Biden has approved more than $17 billion in loan debt forgiveness for more than 700,000 borrowers including students with disabilities, public service workers and students who were defrauded by their schools.
According to the U.S. Department of Education, if education debt was slashed by $10,000 student loan debt, across the country would fall from $1.7 trillion to $1.3 trillion.
On the other hand, if $50,000 in debt is canceled out, the outstanding loan balances would fall to $700 billion, giving about 80% of borrowers a break.
If you are faced with student loan debt, The U.S. Department of Education offers a variety of repayment plans.
For example, an income-driven repayment (IDR) plan is based on how much money you make. Under an IDR plan, payments may be as low as $0 per month.
For more information on how to prepare for loan repayments, visit https://studentaid.gov/articles/6-ways-prepare-repayment-begin-again/.