Not Paying Student Loans, Again
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If you have current federal student loans, you know that loan repayment has been on pause for the last two years, and that pause was about to end on Feb 1 of next year. The Trump administration initially suspended payments in March 2020 and in August of last year, the Biden administration made a "final extension" of the federal student loan payment pause to January 31, 2022. The "final extension" turned out to not be final after all. The Omicron variant was a factor in Biden's administrations' decision to push Federal student loan repayment is pushed back 90 days.
- 42 million people had federal student loans of some form as of fall 2021, amounting to nearly $1.6 trillion
- 5 million other borrowers currently in school who are not yet paying back loans but are accruing interest.
- About a third of Federal student loan borrowers are in default.
According to the latest Education Department data, about a third of borrowers are in default or delinquency and the average monthly payment is $400 a month. If you have a loan in default, the pause affects you too. The pause on collections and zero percent interest rate on defaulted student loans will also end March 1 of next year.
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