Student Loan Forbearance Program Ends January 31st, 2022

Get ready, the federal student loan forbearance program, administered by the Department of Education, is being discontinued.

The payment suspension, interest-free forbearance program, enacted on March 13th, 2020 by then-President Trump, will expire on January 31st, 2022. That means payments on federal student loans will begin again as soon as February 1, 2022.

President Trump had paused all federally-held student loan payments, and set the interest rate to 0%, to help borrowers navigate Covid-19. Policymakers have sought, and been granted under both President Trump and President Biden, three extension periods: from September 30, 2020 to December 31, 2020, January 31, 2021, September 30, 2021 and currently January 31, 2022.

Borrowers are wondering whether there might be a fourth payment pause and interest waiver extension. President Biden’s blanket promise of some loan forgiveness might not be approved by then.

A recent survey, conducted by The College Investor, notes that 71% of those borrowers state they are financially ready to start making payments again.

Of those who were surveyed, only 65% say they know what their loan payment is going to be when it begins. A lack of clear communication from the Department of Education around initiating payments again is making borrowers worry about these details, according to the survey.

The Public Service Loan Forgiveness program, known as PSLF, is a program that was created by Congress in 2007 to encourage more college graduates to pursue careers in public service.

It promised that if employees of governments or nonprofit groups made 10 years of monthly payments on their federal student loans, the remainder would be canceled, with certain other restrictions and conditions attached that made it very hard for students to decipher.

On October, 6th, the Education Department temporarily relaxed certain parts of the program to make more borrowers eligible for relief.

As reported by the Associated Press, Education Secretary Miguel Cardona said his Department would drop some of the toughest requirements under the HEROES Act of 2003, which allows the Department to waive certain rules due to a national emergency. But, he added, the Department loses that flexibility this coming October 2022.

President Biden’s administration has vowed to make improvements to the PSLF through a federal rulemaking process. Hearings for that process have already begun. The rulemaking process can sometimes take years to put changes into effect.

It appears there are no permanent quick fixes for those with student loans, unless, of course, bipartisan compromise can be obtained from Congress and the Senate. President Biden campaigned on providing $10,000 in student debt cancellation as coronavirus relief and stimulus, adopting the plan from Senator Elizabeth Warren. Those discussions are continuing.

Meanwhile, those Americans with student debt are left to wonder what their payments will be, how they will be structured, and whether or not any part of their debt will be forgiven.

Somehow, forgiving debt has slipped down the list of priorities on most political leaders' agendas. We are now one year into the Biden administration and he has yet to reach an agreement with Congress and the Senate on the specifics of debt forgiveness.

Rest assured, political posturing has been the primary cause of the delay. Senate Minority leader Mitch McConnell has steadfastly refused to entertain any consideration of this issue unless he gets movements on other political issues that he deems more pressing.

The nation is at a standstill, deadlocked in disagreement over if, when, and how should debt be forgiven. Meanwhile, students across America are furtively waiting for news on a possible breakthrough.

That doesn't paint a very bright picture for a Merry Christmas or a Happy New Year.

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This article was originally published elsewhere.