On April 6, 2022, the Biden Administration announced that the U.S. Department of Education will extend the suspension of most federal student loan payments through August 31, 2022. Payments were set to resume on May 1 after being on hold since the beginning of the COVID-19 pandemic. This is the sixth time the moratorium has been extended in the last two years. However, the administration didn't announce any plans for widespread student loan cancellation.
Borrowers will have their payments automatically suspended without penalty or accrual of interest. Collection actions, wage garnishments, and Treasury offsets for defaulted federal student loans are also paused through August 31, 2022.
In addition, the administration announced that borrowers who are delinquent or in default will receive a fresh start—their loans will be automatically returned to good standing, and any delinquency will be cured.
The suspension applies to Federal Direct Loans and Federal Family Education Loans (FFELs), but only FFELs that the U.S. Department of Education owns, not nondefaulted FFELs held by other entities. Borrowers with Perkins Loans held by entities other than the Department of Education and nondefaulted HEAL loans also aren't covered.
Private student loan borrowers don't get relief either. If you have private student loans, call your lender to see if any alternatives are available to help you out.
Again, collection actions, wage garnishments, and Treasury offsets for defaulted federal student loans are on hold through August 31, 2022.
One new benefit not included along with past payment suspensions is that millions of borrowers who defaulted on their federal student loans will have their loans restored to good standing, and any delinquency will be cured.
As with previous payment pauses, suspended payments will likely count as qualifying payments for student loan forgiveness programs, including IDR forgiveness and PSLF forgiveness.
The Biden administration has canceled billions of dollars in federal student loan debt. In addition to the payment relief discussed in this article, the administration has:
Also, the American Rescue Plan Act exempts student debt forgiveness from federal taxation until January 1, 2026, and covers Direct Loans, FFELs, and private student loans.
To get more information about the payment suspension and other available support for student loan borrowers, go to StudentAid.gov.
Effective date: April 6, 2022