For almost 2 years many have had a pass on paying back their student loans but come Feb. 1, 2022, those payments will start up again.
That’s because President Biden has ended the student loan moratorium that will expire on Jan. 31, 2022, and payments are set to resume on Feb 1.
Since March 27, 2020, payments on federal student loan payments were frozen and the federal student loan interest rate was at 0%, all due to the pandemic.
For months on end, various politicians and numerous organizations including the American Civil Liberties Union, the American Federation of Teachers, the NAACP, and the Student Borrower Protection Center have requested Biden to extend the pause.
“The Department of Education is already communicating with borrowers to help them prepare for the return to repayment on February 1,” said Biden Press Secretary Jen Psaki in a press conference. “41 million borrowers have benefitted from the extended student loan payment pause, but it expires February 1, so right now we’re just making a range of preparations.”
She also said the Biden Administration “will engage directly with federal student loan borrowers to ensure they have the resources they need and are in the appropriate repayment plan” and that they are “still assessing the impact of the Omicron variant.”
A recent survey of 33,703 student loan borrowers by the Student Debt Crisis Center found that even among student loan borrowers with full-time employment, 89% say they’re not financially secure enough to begin making payments after Feb 1. And 21% say they will never be financially secure enough to resume payments.
Additionally, more than 10 million student loan borrowers will have their servicer changed by the end of 2021. Servicers should notify borrowers if their loans have been transferred but some borrowers may miss this notification.
Borrowers should check the federal student aid dashboard before the pause ends to make sure they don’t miss payments, or send payments to the wrong place.
Borrowers can check out debt relief through the Public Service Loan Forgiveness Program, and may be able to enroll in the income-driven repayment plan before payments resume if they qualify.
The Department of Education is offering a limited PSLF waiver so borrowers can have their previous payments counted, “regardless of loan type or repayment plan.” Borrowers have until Oct. 31, 2022, to complete the temporary waiver.
For more information visit here.
Source: Studentaid.gov and various news sites