The Biden administration will relieve Americans from paying their federal student loans through the end of January 2022, extending the pause for the last time as the government seeks to keep the economic recovery rolling.
The move continues the suspension of payments for all loans owned by the Education Department, maintaining a 0% interest rate for the loans and keeping in place a freeze on the collection of defaulted loans. Loan payments will begin coming due again on February 1.
All of the loan measures, first adopted in March 2020, were to expire at the end of September. The administration intends for this to be the final extension of the protections and announced the extension Friday to give certainty to borrowers and loan servicers alike, a person familiar with the matter said on the condition of anonymity to preview the plan.
The announcement gives servicing companies who process payments for the Education Department more time to prepare for the influx from borrowers. In all, 41 million borrowers benefited from the interest rate freeze, including several million current students.
“The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency,” Education Secretary Miguel Cardona said in a statement. “As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment.”