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Will the federal student loan payment pause be extended past August?

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The current break on student loan payments is set to expire on Aug. 31, 2022, following a series of extensions, which means that in four months millions of federal student loan borrowers will be on the hook for monthly payments with interest for the first time since March 2020. While the U.S. Department of Education previously stated that the forbearance period would end on May 1, its most recent press release says that the extension was implemented in response to the economic consequences of the COVID-19 pandemic.

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The student loan payment pause now ends on Aug. 31, 2022. Borrowers should prepare to resume making their scheduled payments in September or consider alternative repayment options.

The latest extension was issued to make transition into repayment easier

The student loan payment freeze has been extended six times since March 2020, with each extension issued for economic reasons related to the COVID-19 pandemic. While the economy is recovering, the press release says that “President Biden has made clear the continuing need to respond to the pandemic and its economic consequences, as well as to allow for the responsible phase-down of pandemic relief.”

“The extension will provide additional time for borrowers to plan for the resumption of payments, reducing the risk of delinquency and defaults after restart,” the press release reads. The department also announced that it will allow federal borrowers with delinquent payments or defaulted loans to reenter payment in good standing.

As with previous extensions, the administration also promised that it would use this time to improve federal servicer accountability and oversight, which has been one of its biggest goals in 2022 following several reports of federal loan mismanagement.

Will there be another extension?

As the economy recovers, the Education Department is less likely to continue extending the forbearance period. While another extension is not impossible, federal student loan borrowers should prepare to resume making regularly scheduled payments in September.

You’ll receive a billing statement from your loan servicer at least 21 days before your first payment is due, and you may receive additional communication about the end of the forbearance period before that. You can use these final few months of the payment pause to make interest-free payments, focus on private student loan payments or pay down high-interest debt, like credit card debt.

However, if you’re concerned about making payments again in September, you have options. If you’re looking for a lower monthly payment, consider enrolling in an income-driven repayment plan or Public Service Loan Forgiveness – which has temporarily loosened its eligibility requirements through Oct. 31 – or apply for federal forbearance if you don’t have the resources to start up payments. You can also think about refinancing with a private lender if you can get a lower interest rate and you aren’t worried about losing federal benefits.

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Written by
Hanneh Bareham
Student loans reporter
Hanneh Bareham specializes in everything related to student loans and helping you finance your next educational endeavor. She aims to help others reach their collegiate and financial goals through making student loans easier to understand.
Edited by
Student loans editor