Student loan debt in the U.S. exceeds $1.7 trillion. Approximately one-third of student loan borrowers are in default. The average monthly student loan payment is $400 per month. The Student Loan Forbearance under the CARES Act excused borrowers’ payments until January 31, 2022. The government has extended this payment pause another three months. Student loan borrowers will have to resume payments on May 1, 2022.
PAYMENT PAUSE
- Federal student loan payments are not due during the payment pause.
- No interest accrues during this period.
- The government does not take any enforcement actions against defaulted borrowers during the payment pause.
- The government has SUSPENDED garnishment of wages, tax refunds, and Social Security checks of defaulted borrowers during the payment pause.
- The payment pause is automatic. The borrower does not have to request a pause on student loan payments.
APPLICABLE STUDENT LOANS
The payment pause applies to government loans whether current or in default. The payment pause does NOT APPLY to private student loans. The following Federal government loans are subject to the payment pause:
- DIRECT Loans
- FFEL Loans
- Federal Perkins Loans
- HEAL Loans
INCOME DRIVEN REPAYMENT PROGRAMS
The payment pause also applies to student loan borrowers participating in Income Driven Repayment programs.
- The excused payments still count towards the IDR’s total payments!
PUBLIC SERVICE LOAN FORGIVENESS
In addition, the payment pause applies student loan borrowers participating in the Public Service Loan Forgiveness program.
- The excused payments count towards the 120 monthly payments required under such program!
OPT OUT OF PAYMENT PAUSE
- You may opt out of the automatic forbearance.
- Any payments, full or partial, made during the forbearance period apply to PRINCIPAL!
- So you can pay down your loans during the payment pause.
