Suspension of payment of student loans extended until January 2022


The US Department of Education has said it will be the “final extension” of the freeze on student loan repayments caused by the COVID-19 pandemic.

WASHINGTON – Editor’s Note: The attached video is from before the latest expansion was announced.

The Biden administration announced on Friday that the hiatus on federal student loan payments would be extended until January 2022. The announcement comes just weeks before the freeze expires in early October.

Student loan payments were suspended with the CARES Act in March 2020, at the start of the coronavirus pandemic in the United States. The forbearance was initially due to expire almost a year ago, in September 2020, according to CNBC, but has been extended three times since then. Friday’s announcement, according to the US Department of Education, will be the “last extension.”

Borrowers will not have to make payments on federal student loans during the moratorium, interest rates will be set at 0%, and debt collection efforts will remain on hiatus. The suspension will expire on January 31, 2022.

“The payment break has been a lifeline that has allowed millions of Americans to focus on their families, health and finances instead of student loans during the national emergency,” the US secretary told Education. Miguel Cardona said in a press release. “As our country’s economy continues to recover from a deep hole, this latest extension will give students and borrowers the time they need to plan for the restart and ensure a smooth return to repayment. The ministry’s priority is to support students and borrowers during this transition and to ensure that they have the resources they need to access affordable, high-quality higher education.

The department says it will start informing borrowers of the extension over the next few days and plans to free up resources and other information to help people plan for repayment on their loans, when bills finally come due. January 2022.

As the July jobs report indicates, the US economy could rebound, but some fear borrowers may not be ready to continue paying so soon. Democrats, including Senate Majority Leader Chuck Schumer, NY, and Senator Elizabeth Warren, Mass., Recently urged Biden to extend the moratorium until at least March 2022.

Schumer, Warren and Rep. Ayanna Pressley, D-Mass. Applauded the extension in a joint statement Friday, saying it relieves millions of borrowers facing a “dire financial cliff.”

“The payment break has saved the average borrower hundreds of dollars a month, allowing them to invest in their future and support their families,” Democrats said.

The extension drew criticism from conservatives, including Rep. Virginia Foxx, the top Republican on the House Education and Labor committee.

“I regret that Secretary Cardona has not shown real leadership in working with Congress to responsibly hand over the portfolio for repayment by October 1 of this year,” Foxx said in a statement. “It is nothing less than a dereliction of duty.”

The Associated Press contributed to this report.


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