Federal Student Loan Payments Are Deferred Until September 30, 2021
A Presidential Memoranda was issued on January 20, 2021, which extended the pause on federal student loan payments and collections, keeping the interest rate at 0%. More than 42 million federal student loan borrowers will have student loan debt relief until September 30, 2021.
An official for the Department of Education wrote within the Presidential Memoranda that "too many Americans are struggling to pay for basic necessities and to provide for their families. They should not be forced to choose between paying their student loans and putting food on the table."
According to the Federal Reserve Bank of New York, student loan debt stood at $1.55 trillion toward the end of 2020. Federal student loan payments have been on pause since March 2020 due to the spread of COVID-19, which has caused unemployment rates to skyrocket amongst millions of Americans.
With the executive order to continue the freeze on student loan payments, borrowers can continue to redirect their money to build their emergency fund, pay household bills, and other necessities.