Today, August 6, 2021, President Biden announced the pause on federal student loan repayments “one final time until January 31, 2022.” The key words may be “one final time,” so borrowers should plan accordingly. Biden’s statement reasons that this gives student borrowers more breathing room as the economy recovers:
“On my first day in office in January, I directed the Department of Education to pause federal student loan repayments for millions of Americans through September. The pause has been a critical lifeline so they don’t have to choose between paying for basic necessities or their student loan during the pandemic that upended their lives.”
“As today’s jobs numbers show, we have the tools that will allow us to beat COVID-19 and keep our economy recovering at a record rate. But we know there is more work to do and the road will still be long for many people – especially for the one in six adults and one in three young people who have federal student loans.”
“That’s why today, my administration is extending the pause on federal student loan repayments one final time until January 31, 2022. This will give the Department of Education and borrowers more time and more certainty as they prepare to restart student loan payments. It will also ensure a smoother transition that minimizes loan defaults and delinquencies that hurt families and undermine our economic recovery.”
The Department of Education also released a statement with some words from U.S. Secretary of Education Miguel Cardona:
WASHINGTON – Today, the U.S. Department of Education (Department) announced a final extension of the pause on student loan repayment, interest, and collections until January 31, 2022. The Department believes this additional time and a definitive end date will allow borrowers to plan for the resumption of payments and reduce the risk of delinquency and defaults after restart. The Department will continue its work to transition borrowers smoothly back into repayment, including by improving student loan servicing.
“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 final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment. It is the Department’s priority to support students and borrowers during this transition and ensure they have the resources they need to access affordable, high quality higher education.”
The Department will begin notifying borrowers about this final extension in the coming days, and it will release resources and information about how to plan for payment restart as the end of the pause approaches.
Today’s action is one of a series of steps the Department has taken to support students and borrowers, make higher education more affordable, and improve student loan servicing, including:
– Approving $1.5 billion in borrower defense claims, including extending full relief to approved claims and approving new types of claims.
– Reinstating $1.3 billion in loan discharges for 41,000 borrowers who received a total and permanent disability discharge and protecting another 190,000 from potential loan reinstatement.
– Helping 30,000 small business owners with student loans seeking help from the Paycheck Protection Program.
The details of the repayment pause will be released shortly.