Biden Administration Extends Student Loan Payment Suspension Until May 1, 2022

On December 22, 2021, the Biden Administration announced that the U.S. Department of Education will extend the suspension of payments for most federal student loans again, through May 1, 2022. 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 May 1, 2022.

Which Student Loans Does the Payment Suspension Cover?

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 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 during the coronavirus crisis. Some states have reached agreements with servicers to help borrowers who don't have federal student loans.

Continuing Prohibition on Collection Actions, Wage Garnishments, and Treasury Offsets

Again, collection actions, wage garnishments, and Treasury offsets for defaulted federal student loans are on hold through May 1, 2022. Any borrower with defaulted federal loans whose wages are garnished can get a refund.

Suspended Payments Count Toward Income-Driven Repayment (IDR) Plan Forgiveness, Public Service Loan Forgiveness (PSLF), and Rehabilitation

Suspended payments will count as qualifying payments for the purposes of student loan forgiveness programs, including IDR forgiveness and PSLF forgiveness.

Also, borrowers in default will have their suspended payments count towards the months needed for loan rehabilitation. Suspended payments after the date of the rehabilitation agreement will count toward the required nine payments needed to rehabilitate a loan. If you don't accrue nine months of qualifying suspended or required payments by the end of the payment suspension, you'll have to start making payments when the payment suspension ends to complete the rehabilitation.

Earlier Student Loan Relief Under the Biden Administration

Since taking over the presidency, President Biden has canceled billions of dollars in federal student loan debt. In addition to the student loan relief discussed in this article, the Biden administration has:

• canceled $1 billion of student loans for 72,000 student loan borrowers who attended Corinthian Colleges and ITT Technical Institute and previously had part of their federal student loans canceled under a borrower defense to repayment claim
• canceled debt for about 41,000 borrowers whose federal student loans were discharged due to total and permanent disability and then reinstated
• canceled $500 million of student loan debt for 18,000 student loan borrowers who attended ITT Technical Institute under the borrower defense to repayment rule
• canceled $55.6 million of student loan debt under the borrower defense to repayment rule for 1,800 defrauded borrowers who attended Westwood College, Marinello Schools of Beauty, or the Court Reporting Institute
• provided debt relief for more than 323,000 borrowers with total and permanent disabilities who will get automatic student loan discharges
• canceled $1.1 billion in federal student loans for around 115,000 borrowers who attended ITT Technical Institute, whose loans will be automatically discharged, and
• revamped the Public Service Loan Forgiveness program to allow thousands of student loan borrowers to qualify for loan forgiveness.

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.

Effective date: December 22, 2021