Student Loan Repayment Pause Extended Through August 31, 2022

DON’T Count On Loan Forgiveness

We know for certain that there is NO mention of student loan forgiveness in Biden’s proposed 2022 budget.

The Trump administration paused student loan payments in March 2020. That pause has been extended six times and ends on August 31, 2022. At only three months this latest pause is the shortest. The short time-frame gives the government time to figure out the logistics of resuming payments and servicers time to notify borrowers when their payments will be due.

Restarting the Student Loan Payment System is a Logistics Nightmare!

Can you imagine how difficult it will be to restart a system with $1.75 trillion in debt that has not been used in over two years? Borrowers are facing many uncertainties, including:

  • Will they have the same payment plan, or can it be changed?

  • Will those who were delinquent or in default before the COVID pause still have those loan statuses?

  • What if they moved? How will you be notified at your new address?

John White, Champion Col•EDGE Solutions General Manager, said, “Our phones are busier than ever. It’s sad to know that many borrowers contacting us can’t make long-term financial decisions because they do not know what their budget will be or when student loan payments will resume. It is so frustrating that we have had no guidance on how restarting payments will work. It’s so frustrating to hear when a borrower counts on loan forgiveness and does not plan to make payments.”

Loan payments must resume at some point. Loan forgiveness is unlikely. Actually, in Biden’s proposed 2022 budget, ZERO funds are allocated to student loan forgiveness. Despite no formal announcement, the chances of broad cancelation of debt are dismal.


“The White House only requested more funding — $2.7 billion — to improve customer service for borrowers.” CNBC


Meanwhile, the borrowers who owe $1.75 trillion in student loans have been left in limbo, not knowing what to do with their budget and dealing with rising prices for fuel, groceries, and other necessities. In our inflation-burdened economy, adding back in a student loan payment of hundreds of dollars a month will be another devastating blow to the budget of American families.

How Can You Prepare?

Since the payment pause has been extended six times, we honestly don’t know when payments will resume, but we can borrowers prepare.

  1. Don’t count on loan forgiveness. It’s all over the news…will they or won’t the government offer some student loan forgiveness. Since it is not in the proposed 2022 budget, the best plan is to plan to repay your debt.

  2. Beware of scams. Student Loan Debt Relief Companies scammers are abundant! Read this article to learn how to spot and avoid scams.

  3. Understand that changes have happened. Loan servicers have changed, and many people have moved. Go to gov to find your servicer and make sure they have your correct address, phone number, and email.

  4. Payment plan review. Once you know who your servicer is, check your payment plan. Call the servicer to make changes if you can afford the pre-covid payment plan you were on.

  5. Make payments now. Yes, even during the COVID pause, making payments is wise because it reduces loan principal. Read this article to learn more.

The uncertainty about student loan repayment is challenging right now. No matter when payments resume, those five points could help you stay on track and out of default.

Choosing the Best Strategy

Feeling hopeful that some relief will eventually happen is comforting. Still, we recommend the best strategy is to file now for an Income-Driven Repayment Plan so that you can be ready to resume payments when it happens. Your monthly payment could be as low as zero dollars per month depending on your income and household size. Lastly, keep in mind that the Income-Driven Repayment Plans do have the benefit of potential student loan forgiveness.

Read More About The CARES Act and Student Loans

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