Student Loan Payment Pause Could Extend Beyond September — But Be Prepared To Resume Repayment - Forbes

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In public comments today, U.S. Secretary of Education Miguel Cardona suggested that the current pause on most federal student loan payments, interest, and collections could potentially be extended beyond September 30, which is when the moratorium is currently scheduled to expire. But he also made clear that the administration is planning on student loan payments resuming in October.

In response to a question about the September 30th deadline at an Education Writers Association event, Cardona said, “We’re looking at it. Obviously, we’re going to always take the lead from what the data is telling us and where we are as a country with regards to the recovery of the pandemic. [A further extension] is not out of the question, but at this point, it’s September 30.”

The CARES Act, which Congress enacted last year, temporarily suspended all payments on government-held federal student loans. The legislation also froze interest, and stopped all collections efforts on defaulted government-held federal student loans, as well. But what started out as a relatively short freeze has now been extended to an 18-month pause. President Trump extended the moratorium twice to the end of January 2021, and when President Biden took office, he extended the relief further to September 30, 2021. In March, Biden also expanded the collections suspension to include federal student loans issued through the Family Federal Education Loan (FFEL) program, although FFEL loans in good standing are still excluded from the CARES Act’s payment and interest freeze.

Advocacy groups have expressed concern about the ability of student loan borrowers to resume repayment in October, as well as the ability of student loan servicers to handle the unprecedented simultaneous resumption of payments by millions of borrowers. Secretary Cardona today suggested that there would be a “ramp-up” to make sure student loan servicers properly communicate with borrowers and give plenty of lead time before they receive their first bill.

In the meantime, student loan borrowers should plan on their loans resuming repayment in October. Those who are concerned about affording their student loan payments should consider their repayment plan options, even if the Biden administration winds up extending the relief further into the year. For borrowers who have experienced a reduction in income, an income-driven repayment plan can often provide affordable monthly payments. Borrowers already on an income-driven repayment plan can apply to have their monthly payments recalculated or reduced at any time due to changed circumstances, such as a reduction in income, job loss, or a change in marital status.

Borrowers should also be aware that some student loan servicers have delayed the annual recertification deadlines for income-driven repayment plans well into 2021 or even into 2022. Contact your loan servicer for additional information on when you must next re-certify your income.