Federal student loan repayments have been paused since President Biden took office in January, and they were supposed to be reinstated in September. President Biden announced last week that repayments would be deferred one last time until January 21, 2022.
Biden says the decision will positively affect the 1 in 6 adults and 1 in 3 young people who have federal student loans therefore reducing the negative financial impact of the pandemic on their personal finances.
The pause in repayments only applies to federal student loans owned by the Department of Education, not those owned by banks or other commercial lenders or Federal Perkins Loans that are owned by colleges.
As part of the deferral, loans are also exempt from accruing interest until the COVID emergency relief period ends.
Loan forgiveness is not part of this plan, and student loan holders should be aware of scams related to this deferral. Any correspondence received by borrowers that asks for money to sign up for repayment deferral is a scam.
Information about student loans can be found at Studentaid.gov
Reporting for WGRT – Jessie Wiegand
