Federal Student Loan Forbearance extended until May 2022

Last month President Joe Biden’s administration announced the federal student loan forbearance interest-free payment pause will continue through May 1, 2022.

The previous extension was originally set to expire on Jan. 31, 2022, and was referred to by the Education Department as the last.

The U.S. Department of Education Office of Federal Student Aid began providing temporary relief on ED-owned federal student loans that included the suspension of loan payments, stopped collections on defaulted loans and provided a 0% interest rate in March of 2020. Later that month, the COVID Emergency Relief Flexibilities became law as part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act).

According to the U.S. Department of Education, the forbearance policy does not apply to private student loans. The policy is only applicable for federal student loans owned by the U.S. Department of Education, including direct subsidized loans and direct unsubsidized loans.

“The extension will allow the administration to assess the impacts of the Omicron variant on student borrowers and provide additional time for borrowers to plan for the resumption of payments,” stated the U.S. Department of Education. “The department will continue its work to transition borrowers smoothly back into repayment, including by improving student loan servicing.”

The current loan forbearance is temporary and does not require borrowers to make payments. However, absent any future extension, payments will resume after May 1, 2022.

“Since Day One of this administration, the department has focused on supporting students and borrowers throughout the pandemic and ensuring they have the resources they need to return to repayment successfully,” said U.S. Secretary of Education Miguel Cardona.

The ongoing extension provides individuals the opportunity to explore options for loans and avoid defaulting. The extension is said to help 41 million borrowers save $5 billion per month.

Borrowers can still make payments to their student loans during this payment pause. Financial advisors suggest considering making payments to lower your overall debt for those whose finances haven’t been affected by the COVID-19 pandemic.

Once repayment resumes, you’ll receive a billing statement or notice at least 21 days before your payment is due.

As stated by the U.S. Department of Education Office of Federal Student Aid, you don’t have to pay to get 0% interest or suspended payments for your student loans. Some companies may charge a fee to give you repayment help for federal student loans during the COVID-19 emergency. These companies are not affiliated with or endorsed by the U.S Department of Education.

For more information, visit Federal Student Aid, a U.S. Department of Education office at https://studentaid.gov.

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