Get your wallets ready if you have a student loan: President Joe Biden announced he will restart federal student loan payments beginning Feb. 1, 2022, even though some of his fellow Democrats have pushed him for an extension of coronavirus pandemic relief benefits.
“We’re still assessing the impact of the Omicron variant, but a smooth transition back into repayment is a high priority for the administration,” said White House press secretary Jen Psaki when questioned at a news conference if the Biden administration would consider extending the student loan payment pause, according to a news report.
“In the coming weeks, we will release more details about our plan and will engage directly with student loan borrowers to ensure that they have the resources they need and are in the appropriate repayment plan,” she added in the report.
Borrower balances have been at a standstill and frozen for about two years, with no payments required on most federal student loans since March 2020.
During this time, interest has halted and collections on defaulted debt have been frozen.
Biden and former President Donald Trump extended the pause and most recently, Biden moved the payment restart date from Sept. 30 to Jan. 31, 2022. However, Biden recently stressed there will be no more extensions.
Several lawmakers wrote a letter to Biden recently stating: “The pause on federal student loan payments, interest, and collections has improved borrowers’ economic security, allowing them to invest in their families, save for emergencies, and pay down other debt.”
Before the payments stopped borrowers were paying an average of $393 a month for their federal student loans, according to an analysis from the Roosevelt Institute. In summary, this means, borrowers will be paying about $7 billion a month, or about $85 billion a year when the payments resume.
Biden said during the presidential campaign that he would support canceling $10,000 per borrower, but has not taken action to date. Psaki said the executive authority regarding student loan forgiveness remains under review.
Biden’s Department of Education has made it easier for people who were defrauded by for-profit colleges to seek debt relief, according to the administration.
It has also temporarily expanded the Public Service Loan Forgiveness program that cancels outstanding debt for qualifying public service workers after they have made payments for 10 years.
Borrowers can expect a billing statement or other notice at least 21 days before their payment is due, according to the Department of Education.