During the first year of the new administration, Student Loans have been on the top of Congress’ and the White House’s minds. Here is a summary of what has happened so far, and what might be next:
- The Pause on payments and interest is extended to May of 2022.
This pause, where borrowers don’t have to pay and interest doesn’t accrue on the loans was originally set to expire at the end of January. We can guess that the extension of this “final” pause was due to the new Delta and Omicron Covid variants spread throughout the country. Or, it might be for the Biden Administration to consider more expansive relief. Whatever the reason, this is good news for borrowers. This only applies to Federal Student Loans, and NOT to private loans. If you have a Federal Loan, now is great time to actually make payments, and take advantage of this time to chip away at the principal balance of the loans, because there is no interest added to the loans! These suspended months continue to count towards the number of years a borrower needs to pay for the Public Service Loan Forgiveness Program, also another benefit.
- Changes in Many Loan Servicers
If your loan has been serviced by Navient, FedLoan Servicing and Granite state Management & Resources, you will get new servicers. Everything else, the terms of your loan will remain the same. As with many transitions with the Department of Education, I don’t expect this to be smooth. Be sure to watch your mail for the official notices. Don’t respond to emails, which could very well be scams!
- Student Loan Forgiveness Under Existing Programs May Be Easier
The Public Service Loan Forgiveness Program has been revamped, and has already provided $2.4 billion in relief to 38,000 borrowers, according to the Department of Education. Other borrowers have already gotten relief due to Total and Permanent Disability, and other people have been given relief because their school closed while they were enrolled.
During this Pause is the time to take action and get your Student Loans in order. Here is the latest from the Department of Education: https://www.ed.gov/news.
Contact us if you have questions about how to get back on track with your student loans.
Daniel J. Winter