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Student loan borrowers just got even more time to get organized and prepare for repayment to resume.
President Joe Biden’s administration announced Wednesday, Dec. 22, that it is extending the pause on federal student loan payments until May 1, 2022. This means payments will not resume until mid-2022 and interest rates will remain at 0%. Biden cited ongoing pandemic-related challenges faced by student loan borrowers as reasoning for the new extension in a White House press release .
“The extension of the student loan pause will give borrowers more time to transition into repayment in May,” says Robert Farrington, a student loan expert and founder of The College Investor. “Given the amount of changes to student loan servicing, this is a win for borrowers who may be losing the child tax credit, have to file their taxes, and more. By moving to May 1, borrowers have a little extra breathing room to get organized and ready.”
The student loan moratorium was originally set to expire on Jan. 31, 2022. The latest extension comes as a bit of a surprise amid growing concern over the Omicron COVID-19 variant: the previous extension was previously described as the “final” extension, according to a statement from the U.S. Department of Education.
While Wednesday’s announcement made no reference of this being the last extension, or whether more might follow, Biden did implore borrowers to start planning now for when payments resume.
“As we are taking this action, I’m asking all student loan borrowers to do their part as well,” Biden said in the release. “Take full advantage of the Department of Education’s resources to help you prepare for payments to resume, look at options to lower your payments through income-based repayment plans, explore public service loan forgiveness, and make sure you are vaccinated and boosted when eligible.”
What to Do in Light of Biden’s Extension of Student Loan Relief
Student loan balances have effectively been frozen for nearly two years, with no accruing interest or payments required on most federal student loans since March 2020. But any student loan debt you had before the COVID-19 pandemic will still be waiting for you in May.
Experts say you shouldn’t count on any of your debt disappearing in the meantime, because it’s unlikely there will be mass student loan forgiveness —not even the $10,000 that …….