On April 6, 2022, the United States Department of Education announced an extension of the forbearance on student loan repayment, interest, and collections through Aug. 31, 2022. In its press release, the Biden-Harris Administration affirmed that responding to the pandemic and its economic consequences is still required, even as the U.S. economy steadily improves and COVID-19 cases continue to decline, while also allowing for the responsible phase-down of pandemic relief.
On March 13, 2020, the Federal Student Aid (FSA) office, acting under an executive order from former President Donald Trump, suspended monthly loan payments, stopped collection on defaulted loans, and reduced the interest rate to 0% on direct, Federal Family Education Loan (FFEL) Program, Federal Perkins Loan Program, and Health Education Assistance Loan (HEAL) Program loans owned by the Department of Education. A week later, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which made these provisions law through Sept. 30, 2020. Until today, following multiple extensions by both Trump and President Biden, the end date had been pushed back to May 1, 2022.
- The U.S. Department of Education has announced an extension of the pause on student loan repayment, interest, and collections through Aug. 31, 2022.
- The Department of Education will continue assessing the financial impacts that student loan borrowers experienced due to the pandemic in order to ensure a smooth transition back into repayment.
- Today’s announcement is part of a series of steps the Biden-Harris Administration has taken to support student loan borrowers.
The Department of Education's Plan
This extension will provide student loan borrowers with additional time to prepare for the resumption of payments, which will minimize the risk of future delinquency and defaults. While preparing for a smooth transition back into repayment, the Department of Education will continue assessing the financial impacts that student loan borrowers experienced due to the pandemic. When payments do resume, the impact of prior delinquencies and defaults will be eliminated for lendees with paused loans, allowing student loan borrowers to reenter repayment on more equal footing.
Additionally, the Department of Education will continue to provide student loan relief to borrowers. Because failing to complete the necessary (and often complex) paperwork can prevents borrowers from getting help on their loans, FSA is currently planning to establish new partnerships that will ensure public service workers with student loans are automatically credited with progress toward forgiveness. FSA will also continue to transfer existing loans to servicers that have committed to working under the more recent (and more stringent) accountability rules.
“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.”
One Part of a Bigger Plan
In addition to today's announcement, the Biden-Harris Administration has taken several other steps to support students and borrowers, make higher education more affordable, and improve student loan servicing. These steps include:
- Revamping the Public Service Loan Forgiveness (PSLF) Program, thereby identifying over 100,000 lendees eligible for $6.4 billion in loan relief.
- Providing $7.8 billion in loan relief for over 400,000 borrowers who have a total and permanent disability.
- Approving $2 billion in borrower defense claims to roughly 107,000 borrowers.
- Providing $1.26 billion in closed school discharges to 107,000 borrowers who attended the now-defunct ITT Technical Institute.
- Helping 30,000 small business owners with student loans seeking help from the Paycheck Protection Program.