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As financial uncertainty grew during the coronavirus pandemic, federal student loan payments were paused. Now, the Biden administration announced that the payments would resume on February 1, 2022.
White House Press Secretary Jen Psaki told reporters during a news conference that more details about loan repayment will be made available in the coming weeks. She said that “a smooth transition is a high priority,” and the impact of the Omicron variant is being evaluated.
STUDENT LOAN PAYMENTS: Jen Psaki was asked if President Biden will extend the student loan payment pause. pic.twitter.com/F86ZSGtjiK
— Forbes (@Forbes) December 11, 2021
“41 million borrowers have benefitted from the extended student loan payment pause, but it expires February 1, so right now, we’re just making a range of preparations,” Psaki said.
She said the Department of Education is in the process of reaching out to borrowers to prepare them to return to repayment. There was no mention of any student loan forgiveness.
What can you expect if you are one of the more than 42 million people with a federal student loan? Be on the lookout for a billing statement of notice from your loan servicer to know when your payments will resume.
It’s not a guarantee that automatic payments will resume. Contact your lender if you were set up on automatic payment before the pause. If you’re not set up, you may want to consider it. Federal student loan lenders incentive automatic payments with a slight reduction in the interest rate.
The administration has not announced plans to waive interest. Still, federal loans have a fixed interest rate, so that should not change from what it was before the pandemic.
Of course, that could all change since details are still being ironed out. Expect more information on student loan repayment over the next several weeks.
