A late-breaking tweet Friday from Secretary Miguel Cardona heralded the announcement that the Department of Education has extended the pause on student loan repayments, interest, and collections until January 31, 2022.
The Department said it believes this additional time and definitive end date will allow borrowers to plan for the resumption of payments and reduce the risk of delinquency and defaults after the restart. The Department will continue its work to transition borrowers smoothly back into repayment, including by improving student loan servicing.
“The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency,” Cardona said in a statement. “As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for the restart and ensure a smooth pathway back to repayment. It is the Department’s priority to support students and borrowers during this transition and ensure they have the resources they need to access affordable, high quality higher education.”
The Department will begin notifying borrowers about this final extension in the coming days, and it will release resources and information about how to plan for payment restart as the end of the pause approaches.
Today’s action is one of a series of steps the Department said it has taken to support students and borrowers, make higher education more affordable, and improve student loan servicing, including:
- Approving $1.5 billion in borrower defense claims, including extending full relief to approved claims and approving new types of claims.
- Reinstating $1.3 billion in loan discharges for 41,000 borrowers who received a total and permanent disability discharge and protecting another 190,000 from potential loan reinstatement.
- Helping 30,000 small business owners with student loans seeking help from the Paycheck Protection Program.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.