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President Biden announced an extension to the student loan forbearance period that was originally set to expire on Jan. 31, 2022. The payment break now continues through May 1, 2022, giving borrowers and federal servicers more time to prepare for the resumption of payments. Here’s what you need to know about this week’s student loans trends and how they could impact your payments.
1 current trend within student loans for the week of Jan. 3, 2022
1. Biden administration announces an extension to the federal student loan relief period
The federal student loan forbearance period, which was set to end on Jan. 31, 2022, received a 90-day extension in late December. Federal student loan borrowers can now benefit from no required payments and no interest through May 1, 2022. In a press release, the Education Department cited potential economic concerns over omicron, the latest COVID-19 variant, as the primary reason for the extension.
“We are committed to not only ensuring a smooth return to repayment, but also increasing accountability and stronger customer service from our loan servicers as borrowers prepare for repayment,” Education Secretary Miguel Cardona said.
How this affects student loans
This extension will give federal student loan borrowers and servicers more time to prepare for payments and the ongoing overhauls of the federal student loan servicing system. The Education Department has stated that this added time will be dedicated to improving the federal servicing system and making sure that the transition back to payments is as smooth as possible.
During this extension, borrowers should craft a plan for their federal student loan payments in May, ensure that their account details are up to date and consider enrolling in alternative repayment plans. Details about the forbearance period and the resumption of payments will come directly from your servicer.
Here’s how you can get prepared
Whether you’re new to student loans or well into repayment, it’s wise to stay informed about how your student loan rates could change. During 2022, more opportunities for cheaper loans or loan forgiveness could open up; keep an eye on the Bankrate student loans news hub for the latest trends.