Pause on Student Loan Payments Extended to 2022

Borrowers will receive an additional suspension of student loan payments for four months after the federal government announced a further extension of a pandemic assistance program.

Eight weeks after the program ended on Sept. 30, the pause in student loan payments, interest, and delinquent loan collections was extended until Jan. 31, 2022, the Department of Education announced Friday. This is the last time it will extend the pause, the department said, adding that the end date will allow borrowers to better plan for resuming payments.

About 26 million borrowers have not had to make payments on their federal student loans thanks to the aid program, according to data from the department, with an interest free rate of about 41 million. Those borrowers will receive notification of the new start date for the payment from the federal government in the coming days, according to a statement issued Friday.

The payment disruption was a lifesaver that allowed millions of Americans to focus on their families, health and finances instead of student loans during the national emergency, Education Secretary Miguel Cardona said in a statement Friday. Market. "As our nation's economy continues to rebound from a deep hole, this final extension will give students and borrowers the time they need to plan for a restart and ensure a smooth path back to payment."

Pause Began March 2020

Payments and interest on federal student loans have stalled since March 2020, at the beginning of the pandemic. In one of his first acts in office, President Joe Biden issued an eight-month extension in January, extending the expiration of the program to at least September 30.

Little has been officially said about the break since then, despite a suggestion from Cardona in May that another extension "was not ruled out." The lack of an update left borrowers and loan officers confused as the deadline approached.

Pressure to extend the hiatus had built up in recent months, and lawmakers and nonprofits urged Biden to extend the term, especially after two loan officers, the companies hired by the federal government to run student loans, announced last month their intention to leave. in December.

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Source:Yahoo Finance

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