Student Loan Repayment Paused Again Until Aug 2022

Key Takeaways
  • The Biden Administration stated they will be extending the student loan relief period until August 31, 2022. 
  • Extending the loan relief was because the ongoing pandemic has affected many people’s financial positions; resuming payments would increase the risk of defaults and delinquencies. 
  • As the inevitable loan repayment date is coming, below are some methods for paying off your loans without compromising your financial status.
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A White House press release by the Biden Administration announced that federal student loan payments had been paused, again, until August 31, 2022. Since the start of the pandemic in March 2020, student loans have been paused to allow those with outstanding student debt an opportunity to use their money to fund expenses that have a higher necessity. Although this is the sixth extension, it is essential to look at different ways to begin paying off student loans should repayments start again on September 1. 


Reason Behind Extending the Pause


With the worst days of the pandemic hopefully behind us, its unprecedented economic disruptions are still lingering. Although the government provided financial assistance through stimulus checks earlier during the pandemic to the general population, no other aid has come as the job market has started to rebound. However, as the pandemic continues and inflation increases, many people are still struggling financially.  


Roughly 46 million Americans are in nearly $1.75 trillion in total U.S. student loan debt. Even before the financial struggles caused by the pandemic, about 11% of student loans were 90 days or more behind. 




A recent analysis conducted by the Federal Reserve indicated that millions of borrowers would face times of financial difficulty if they had to begin paying their student loans. It could also increase the possibility of delinquencies and defaults. Furthermore, U.S. Secretary of the Department of Education, Miguel Cardona, mentioned that with the extension of the relief period, borrowers would have more time to prepare themselves for the eventual repayment, making the transition smoother. 


Thus, these reasons led to the Biden Administration extending the freeze.


Will there be Student Loan Cancellations?


According to White House Chief of Staff Ron Klain, it is still too early to tell whether there will be student loan debt cancellation for all borrowers. He stated President Biden would continue to explore different options before the pause period ends. However, as of right now, it is too early to tell whether an executive action will be executed to cancel student loans. 


Recommended Read: Are Navient Student Loans Canceled?


How to Pay Back Student Loan Debt


Although it is uncertain when the repayment of student loans will begin again, below are two potential ways to pay off your debt when the time comes.


Income-Driven Repayment Plans


The main factor in this type of repayment plan is your monthly income. However, other factors are also considered, such as the number of people living in your household. Once all the preliminary information has been gathered, a monthly repayment amount will be computed. 



The income-driven repayment plan allows you to pay a fair amount each month. If you wish to apply for this plan to pay off your student debt, the application can be found on the federal student aid website. 



Public Service Loan Forgiveness Program


The second type of loan repayment plan is the Public Service Loan Forgiveness Program. This program allows people with outstanding student loans to work full-time for public service and qualified employers. Once the individual has made 120 monthly payments under an approved repayment plan while working under a qualified employer, they become eligible to have the remainder of their debt forgiven as an incentive for working for public service. 


The Money Wrap-Up


It is difficult to predict the outcome of the process of loan servicing. However, it is better to remain conservative and treat the situation as if the payments are expected to resume. Therefore, now is the time to begin saving money and determining which method above, or other repayment plans, is more convenient for you to pay off your student debt.

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