Student Loan Pause Extended and Student Loan Forgiveness Coming for Many Borrowers
Attention student loan borrowers! Today (August 24, 2022) President Biden announced the official word that the payment pause on federal student loans has been extended for the seventh time! The administrative forbearance is now set to expire on December 31, 2022. During these remaining months:
- Loan payments continue to be suspended on federally-held student loans and set to resume on January 1, 2023
- The interest rate remains at 0% until the end of the payment pause;
- Months during the administrative forbearance continue to count towards the 120-payment count for qualifying borrowers working towards Public Service Loan Forgiveness (PSLF) and 20 or 25 years required for income-driven repayment forgiveness.
- Defaulted Federal Direct Loans
- Defaulted Federal Family Education Loan (FFEL) Program Loans
- Note: FFEL loans that defaulted after March 13, 2020 were retroactively returned to good standing due to an announcement back on March 30, 2021, so these loans are not eligible for Fresh Start benefits
- Defaulted ED-held Perkins Loans (not those held by schools)
- Ability to apply for federal student aid
- Halted collections
- Opportunity to apply for government-backed loans, including mortgages
- Access to rehabilitate these federal loans in the future, if needed
- Verify the loan holder has accurate contact information
- The Default Resolution Group can confirm eligible loans and loan holder
- Review correspondence from the Department of Education and take the appropriate action no later than one year after the end of the loan pause