On April 6, the U.S. Department of Education announced a record sixth extension for federal student loan repayment, interest, and collections, through August 31, 2022.1The fifth payment pause was set to end on April 30, 2022. The six extensions have postponed federal student loan payments for almost two and a half years — since March 2020 at the start of the pandemic.
Education Secretary Miguel Cardona stated: "This additional extension will allow borrowers to gain more financial security as the economy continues to improve and as the nation continues to recover from the COVID-19 pandemic.1
As part of the extension, the Department of Education noted that it will give all federal student loan borrowers a "fresh start" by allowing them to enter repayment in good standing, even those individuals whose loans have been delinquent or in default. More information about loan rehabilitation will be coming from the Department in the weeks ahead.
The Department's press release stated: "During the extension, the Department will continue to assess the financial impacts of the pandemic on student loan borrowers and to prepare to transition borrowers smoothly back into repayment. This includes allowing all borrowers with paused loans to receive a 'fresh start' on repayment by eliminating the impact of delinquency and default and allowing them to reenter repayment in good standing."1
Approximately 41 million Americans have federal student loans.2 There are a number of things borrowers can do between now and September 2022.
1- The Washington Post, April 6, 2022
2- U.S. Department of Education, 2022
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