The student loan payment break ends in 60 days as lawyers are asking for it to be set aside. Here is the last one.


For much of the past two years, most federal student loans have been on hiatus. No payments were due, no interest accrued, and collection activities for delinquent federal student loans were halted.

The initial pause in student loan payments was established by the CARES Act – a massive stimulus bill passed by Congress in March 2020 in response to the rapidly deteriorating economic and public health situation associated with the Covid-19. Lawmakers initially envisioned a six-month hiatus on student loan payments, but that relief was later extended and extended by former President Trump and then President Biden with the help of government action. executive.

The latest extension of the moratorium on student loan payments by Biden is expected to end on Jan.31, 2022 – in 60 days. Here’s what borrowers need to know.

Student loan payment break ends in 60 days

The national moratorium on student loan payments, interest and collections will end in just two months. So far, all signs are that the hiatus will not be extended, despite earlier statements by officials in the Biden administration suggesting the Education Department would take economic and pandemic conditions into account.

Surveys suggest that many borrowers are unwilling to resume payments. In a nationwide survey of thousands of student loan borrowers, Savi and the Student Debt Crisis Center found that 89% of borrowers are not financially ready to restart repayment. Most of those interviewed also said that the payment break has been critical to their financial well-being and that this relief has helped pay other bills during the pandemic. More than a quarter (27%) of respondents say that a third or more of their income will go to student loans when payments resume. 10% say that half of their income will go to paying off student loans.

But so far, the Biden administration appears to be moving forward with resuming repayment.

Changes to the student loan service at the end of the payment break

The Department of Education has announced several upcoming changes to the student loan service that could impact borrowers as they start repaying. Here is the last one:

  • Department of Education officials approved Navient’s proposal to transfer his federal student loan accounts from the Department of Education to another company called Maximus

    . Maximus is another contractor in the department who primarily managed his portfolio of delinquent federal student loans. Maximus will work as “Aidvantage”. In an earlier statement, Navient said transfers to Aidvantage are expected to be completed by the time reimbursement resumes in February.
  • FedLoan Servicing, the Department of Education wing of the Pennsylvania Higher Education Assistance Authority (PHEAA), also announced that it would be withdrawing from the department’s federal loan management system. FedLoan is the primary contractor operating the Distressed Public Service Loan Forgiveness Program (PSLF). While FedLoan was initially supposed to shut down by the end of this year, and some borrowers have already seen their student loans transferred from FedLoan to other departments, the Biden administration has extended FedLoan’s contract to an additional year. As a result, most borrowers with FedLoan will not see any change in service until after reimbursement resumes in February.
  • The Department of Education has agreed to a two-year extension of service contracts with several of its other federal student loan service contractors, including Great Lakes Higher Education, Edfinancial, MOHELA and Nelnet. Borrowers whose loans are managed by these companies should not see any change in service in the short term.

Advocates demand forgiveness for student loans

As borrowers move closer to billing their student loans, advocates continue to push the Biden administration to embrace a blanket student loan forgiveness.

“Today would be a great day to write off at least $ 50,000 in student loan debt per borrower,” Representative Pramila Jayapal (D-WA), chair of the House Progressive Caucus, tweeted earlier today. Advocacy groups and congressional progressives have urged President Biden to write off $ 50,000 or more in student loan debt for each borrower. Biden backed broad student debt forgiveness during his 2020 presidential campaign, but he opposed larger amounts of student loan cancellation and questioned whether he had the legal authority to ‘act without Congress.

“Almost 90% of student loan borrowers are not ready to restart payments. It’s time to [President Biden] to use his current authority to #CancelStudentDebtSenator Elizabeth Warren (D-MA), one of the main supporters of the sweeping student loan cancellation, said in a tweet last week. “Alleviating the debt burden will help families and boost our economy . That’s what you should do.”

The Biden administration enacted billions of “targeted” student loan cancellations by expanding and streamlining existing federal student loan cancellation programs, such as through civil service loan cancellations. But the total amount canceled so far – estimated by the ministry at around $ 11.5 billion – barely reduces the $ 1.8 trillion in outstanding student debt.

Last spring, the Biden administration promised to release a legal note outlining the potential authority Biden would have to enact a large student loan forgiveness through executive action. This memo was never officially released, but student debt activists were able to obtain a heavily redacted version thanks to a Freedom Of Information Act request. The drafted note gives no conclusive indication as to whether the Biden administration will implement a massive student loan forgiveness, and so far no Biden administration official has suggested a blanket cancellation of the Biden administration. student debt is looming.

Further reading

Student Loan Forgiveness Changes: Who Qualifies and How to Apply for Biden’s Relief Extension

First wave of borrowers secures $ 715 million in student loan cancellations as part of new program expansion

Biden’s $ 11.5 billion student loan forgiveness: some automatic, some not. Here is a breakdown.

Student loan waiver: Ministry of Education clarifies rules for new expanded program


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