Three critical dates for loan repayment and forgiveness



There is a lot going on with student loans. Interrupted payments will resume soon. Many student loan managers are changing. The Biden administration has expanded several student loan cancellation programs, while officials begin work on larger structural changes to major student loan programs. It can be difficult to follow.

For now, student loan borrowers should keep three important dates in mind.

Student loan forgiveness memo by October 22, 2021?

Last week, 15 House Democrats sent a letter to President Biden, urging him to issue a long-awaited legal memo on executive authority to enact widespread student loan forgiveness.

In April, Biden had asked administration officials to research and assess whether he had valid legal authority to write off student loan debt on a large scale. Student loan advocates and their allies in Congress have called on Biden to use executive action to write off $ 50,000 or more in student loan debt, which they say is a perfectly legal move (but d others disagreed, including President Biden himself). The White House had initially suggested that the resulting legal memorandum would be released within a few weeks. But six months later, the administration says there has been no update.

In their letter, House Democrats gave the Biden administration a deadline of October 22, 2021 to release the student loan forgiveness note. Of course, they have no authority to force the White House to act, and the administration could simply ignore the request. But the pressure to release this information will only increase, so watch for updates on that date.

Student loan payment break ends January 31, 2022

Most federal student loan payments have been suspended since March 2020 under the CARES Act. The legislation also froze interest and suspended collections on delinquent federal student loans. The relief was initially supposed to last six months, but has been extended several times. The Biden administration has issued a final extension until January 31, 2022. While anything is possible in theory, the administration has made it clear that there will be no further extension of the payment break beyond this. dated.

This means that millions of borrowers will resume repayment next February. And this resumption of payments comes during a major disruption in the Department of Education’s federal student loan management system. To prepare, borrowers should do the following well in advance of the deadline:

  • Update your contact information, including your mailing address, phone number, and email address, so that you can receive important communications.
  • Save and keep important records like your payment history and key match.
  • Go over your repayment plan and estimate your payment amount when billing resumes in February. Consider requesting another repayment plan or requesting a payment recalculation based on your income, if you are unable to pay your scheduled payments.

Civil service loan forgiveness extension ends October 31, 2022

Last week, the Department of Education announced significant changes to the Public Service Loan Forgiveness Program (PSLF), which provides loan forgiveness to certain borrowers who have dedicated their careers to non-profit work. profit or government. The PSLF program has long suffered from dismal approval rates due to complicated eligibility criteria and poor oversight.

As part of the recently unveiled “PSLF Limited Waiver” program, the Biden administration will expand the original eligibility criteria for the PSLF program. Previously, the PSLF was limited to certain types of federal student loans and specific repayment plans based on the borrower’s income. Only full and on-time payments would be considered, and loan consolidation could be either absolutely necessary or a huge mistake, depending on the specific situation of the borrower. The limited PSLF waiver will change many of these rules, allowing many more borrowers to access the PSLF program and get their student loans canceled much faster.

But the program is only temporary, until October 31, 2022. Some of the changes to the PSLF will be implemented automatically – for example, payments on direct loans that have been rejected due to technical issues (such as no -payment on time or being a penny off) will be corrected, with no action required from the borrower. But other borrowers – such as those with FFEL loans or those who were repaying their loans directly under a non-qualifying repayment plan – may need to take steps such as consolidating, submitting a PSLF application. or employment certification, or both. And if action is needed, it must be done by October 31, 2022.

It’s time consuming, and the Education Ministry is expected to release more information on eligibility and application procedures in the coming weeks. Thus, borrowers do not have to rush into action immediately. But borrowers who could benefit from the expansion of the PSLF will certainly want to mark their agendas. In the meantime, the Ministry has created a website for the expanded program.

Further reading

Student loan borrowers: expect these 4 things by January

Biden to transform civil service loan forgiveness with huge changes: key details

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

What Navient and FedLoan borrowers should know as major changes in student loan service loom


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