Student Loans Remain Frozen
This means the earliest resumption of payments for federal borrowers would be February 2022. This extends the final Trump extension which was due to expire next month.
The original payment moratorium emerged from the CARES Act in response to the COVID pandemic’s economic and social impact. The wide ranging law addressed hardships stemming from government mandates shutdowns and the ensuing job losses. The numerous extensions meant millions of borrowers will approach two years without making payments. Of course, the moratorium and extensions mandate borrowers can miss payments without penalty and interest accrual is frozen. However, this applies to Department of Education subsidized loans. Private lenders underwrite millions in student loans which were never put on hold.
So what happens next? President Biden continues to face calls from progressive lawmakers to enforce outright debt forgiveness for all federally backed student loans. The administration is currently researching the possibilities so stay tuned!