General United States

Federal Student Loan Payments Extended to January 2022

Currently, there is a deferment on all federally-financed student loans until September 30, 2021. This was one of the first actions taken by the Biden administration when Pres. Biden entered office; the original deferment put into place by the ex-president Trump was set to expire in March 31, 2021. The Biden administration had extended the deferment to September 30, 2021.

As the September 30, 2021 deadline approaches, the Biden Administration was in talks with both financial servicing companies and student loan borrowers on their ability to begin pay back. What they found was surprising; while difficulty paying back might have been voiced out by the borrowers, even the financial servicing companies reported difficulty preparing for millions of accounts to switch back over to repayment status; the staffing is not at full capacity, and neither is the technological capability.

Thus, the Department of Education reported today that it would extend the moratorium until January 31, 2022 to give both the financial servicing companies and borrowers the time to transition back into repayment.

This moratorium is planned to benefit more than 41 million Americans.

However, this moratorium is the “final” moratorium, meaning Americans should not be expecting any more extensions on their student loan payment deferment. This news has provided mixed reactions from Congress; for example, Republicans believe that this extension isn’t needed by Americans as the economy was (at least prior to the Delta variant breakout) on its route towards recovery. Democrats applauded the effort but also called for complete forgiveness of the student loans, which is $1.5 trillion.

Regardless of the politics of the matter, American student loan borrowers can sleep soundly until January 31, 2022, as they will not be penalized for not paying their student loans until then.


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