Current student loan news for the week of August 9, 2021
The United States Department of Education recently announced a final extension of the student loan forbearance period, which was scheduled to expire on September 30. The payment break will now last until January 31, 2022. Until then, federal student loan borrowers will not. will be required to make interest or principal payments on their balance, and collections on overdue student loans will remain suspended.
1 current trend in student loans for the week of August 9, 2021
1. Biden Extends Student Loan Forbearance Until January 2022
On Friday, the Department of Education announced that it would extend the break on federal student payments until January 31, 2022. This is the last extension of the break on payments, which was originally introduced by the Trump administration in March 2020 and has been extended several times.
As stated in a Press release, the ministry believes that this additional time is necessary for borrowers to plan to resume their payments and will reduce the risks of default and delinquency. The ministry also said it will ensure borrowers have a smooth transition in January by improving service on federal student loans.
“As our country’s economy continues to recover from a deep hole, this latest extension will give students and borrowers the time they need to plan for the restart and ensure a smooth return to repayment,” said the Secretary of Education Miguel Cardona. “It is the ministry’s priority to support students and borrowers during this transition and to ensure they have the resources they need to access affordable, high-quality higher education. “
How it affects student loans
The Education Department will begin notifying borrowers affected by the extension in the coming days and will provide resources and information on how to plan for resuming payments in January.
Federal borrowers can take advantage of the extension by using skipped payments to bolster an emergency savings or fund or focus on higher interest debt, like private student loans or credit card payments. Borrowers can also choose to make interest-free payments to pay off their federal debt faster.
Key to take away
The student loan payment hiatus is extended until January 31, 2022. Federal borrowers will have news of the services soon and should plan now to resume payments.
Here’s how to prepare
Whether you’re new to the area of student loans or already in advanced repayment, it’s wise to stay on top of how your student loan rates might change. As 2021 continues, more opportunities for cheaper loans or loan cancellations may open up; Keep an eye on the Bankrate student loan news center for the latest trends.