Loan payment

Student loan payment break could extend beyond September, but be prepared to resume repayment

In public comments today, U.S. Education Secretary Miguel Cardona suggested that the current hiatus on most federal student loan payments, interest, and collections could potentially be extended beyond September 30. , the date on which the moratorium is currently due to expire. But he also made clear that the administration planned to resume student loan payments in October.

In response to a question about the September 30 deadline at an Education Writers Association event, Cardona said, “We are reviewing it. Obviously, we’re always going to take the lead in what the data tells us and where we are as a country with regards to the resumption of the pandemic. [A further extension] isn’t out of the question, but at this point it’s September 30th.

The CARES Act, which Congress enacted last year, temporarily suspended all payments on federal student loans held by the government. The legislation also froze interest and halted all efforts to collect delinquent federal student loans held by the government. But what started as a relatively short freeze has now been extended to an 18-month hiatus. President Trump extended the moratorium twice until the end of January 2021, and when President Biden took office he extended the relief until September 30, 2021. In March, Biden also extended the suspension collections to include federal student loans issued through the Family Federal. Student Loan Program (FFEL), although FFEL loans in good standing are still excluded from the payment and interest freeze under the CARES Act.

Advocacy groups have expressed concern over the ability of student loan borrowers to resume repayment in October, as well as the ability of student loan services to manage the unprecedented simultaneous resumption of payments by millions of borrowers. . Secretary Cardona today suggested that there would be a “quickening” to ensure student loan departments communicate properly with borrowers and give them enough time before they receive their first bill.

In the meantime, student loan borrowers should plan to resume loan repayments in October. Those worried about paying off their student loans should consider their repayment plan options, even if the Biden administration ends up extending relief further into the year. For borrowers who have experienced a drop in income, an income-based repayment plan can often provide affordable monthly payments. Borrowers already on an income-based repayment plan can request that their monthly payments be recalculated or reduced at any time due to changes in circumstances, such as reduced income, job loss, or change. marital status.

Borrowers should also be aware that some student loan managers have delayed annual recertification deadlines for income-based repayment plans until 2021 or even 2022. Contact your loan manager for additional information on the loan. next date you will need to recertify your income.

Further reading

At 100 days, here’s what Biden did (and didn’t) do for student loan borrowers

Biparty Bill Would Extend Public Service Loan Forgiveness

Biden Student Loan Forgiveness Review: Should You Take Action Now To Write Off Student Debt Later?

72,000 Borrowers To Get $ 1 Billion In Student Loan Discount – Do You Qualify?

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