Federal student loan borrowers can breathe another sigh of relief: The Biden Administration has extended the pandemic pause on repayments until January 31, 2022. The pause was originally set to expire on September 30.
The policy first went into effect in March 2020 as a response to the economic tumult created by the pandemic. Loans stopped accruing interest, and borrowers could stop their repayments without having to worry about penalties.
Borrowers have gotten four extensions: Two during the Trump administration and two from Biden. By the time this last deferment has ended, borrowers will have had almost two years of not having to pay back their student loans.
That grace period has been a lifeline to borrowers who saw hits to their income during the pandemic. In July, two-thirds of borrowers said it would be difficult to afford loan payments if they resumed the next month, according to a survey from Pew.
Video by Stephen Parkhurst
While only 11% of student loan borrowers were currently in repayment as of June, according to data analyzed by education expert Mark Kantrowitz, that group is benefiting from the pause. All of the money they put into their student debt went straight to principal, saving them big bucks in interest.
The Department of Education says this will be the last extension. If you don't think you'll be able to meet your minimum payment at that point, "talk with your loan servicer about your options," education expert Mark Kantrowitz previously told Grow.
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