US Extends Student Loan Repayment Pause Until May 1, 2022

United States North America COVID-19 by Erudera News Dec 23, 2021

Joe Biden

The United States administration has decided to prolong the pause in student loan repayment, interest, and collections for a period of an additional three more months, up until May 1, 2022.

The loan pause, which was first introduced in a bid to facilitate financial conditions for student borrowers amid the Coronavirus pandemic, was previously set to expire on February 1, 2022. This is the third time that the pause is being extended, Erudera.com reports.

Commenting on the move, the US Secretary of Education Miguel Cardona said that the Biden administration had focused on supporting student borrowers amid the pandemic since day one noting that the additional extension of the loan pause will provide relief for student borrowers amid the spread of the Omicron variant.

As we prepare for the return to repayment in May, we will continue to provide tools and supports to borrowers so they can enter into the repayment plan that is responsive to their financial situation, such as an income-driven repayment plan,” Secretary Cardona said.

He also added that students and borrowers would continue to be at the center of the work of the Department of Education, which amongst others, intends to increase accountability and stronger customer service from loan servicers as borrowers prepare for repayment.

According to the Department of Education, there are 41 million student borrowers in the United States, who through loan repayment pause, will be able to save $5 billion per month in total. The Department encourages these students to enroll in electronic debit and income-driven repayment plans to support a smooth transition to repayment.

The Biden-Harris administration intends to use the additional three months to further evaluate the effect of the Omicron variant on student borrowers while at the same time working to smoothly transition borrowers back into repayment.

Since the current US President Joe Biden took office, he has continuously made decisions towards the facilitation of the financial situation for students and borrowers.

Today’s action is one of a series of steps the Biden-Harris Administration has taken to support students and borrowers, make higher education more affordable, and improve student loan servicing, including providing nearly $13 billion in targeted loan relief to over 640,000 borrowers,” the Department of Education also highlights on its press release issued on December 22.

Amongst others, Biden has forgiven a total of $715 million in student loans for nearly 10,000 student borrowers under the new Public Service Loan Forgiveness (PSLF) program in October 2021. It has also provided $7 billion in relief for 401,000 borrowers who have a total and permanent disability.

According to Erudera.com, there are about 7.8 million Americans at the age of 24 or younger who, in total, have $115.50 billion in student loan debt, while the average debt load of student borrowers of all ages amounts to $39,351.

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