Student Loan Payment Halt Extended (Again) & Good News for Borrowers in Default

If you haven’t already seen the headline, the Biden administration again extended the student loan interest and payment halt, this time for an additional four months, through August 31^st, 2022. All of the same features will remain, such as time spent in this “administrative forbearance” will count towards both PSLF (we assume you know this acronym by now) and Income-Driven Repayment (IDR) plan forgiveness.

Another student loan update from today that isn’t being as widely covered, but is likely good news to up to 8 million borrowers, is that those in default will be considered to have been “rehabilitated” by the payment pause… and assuming they enter one of the many available repayment plans today, they will be back in good standing! More communications will follow to affected borrowers as the end of the pause approaches, but this is great news for the millions who have struggled over the years to start fresh!

Biden’s 2023 Budget Proposal is Telling

All of this said, we’ve heard no word on broad loan cancellation; we continue to expect loan relief to be targeted to those most in need of relief, and those in Public Service roles. Further to this, Biden’s 2023 budget proposal was released last week and contained no expectation of a payment and interest halt or any broad cancellation. However, borrowers using Income-Driven plans will be excited to learn that the “tax bomb” featured in these plans at the forgiveness period is slated to be permanently removed.

New Resources for PSLF Employers and Staff

While we’ve got your attention, we’ve got two new resources available! First, we hosted a webinar for PSLF-qualified employers and their staff… you can register to view the recording here.

That’s all for now, folks… but remember: ‘til DEBT do us part!

About Author

Jason DiLorenzo

Jason is the Founder of BenElevate, an early stage fintech company working to address the student debt crisis by bringing to bear tools, expertise, and bespoke solutions to streamline student debt management for borrowers and employers.