Since the 27th of March, 2020, federal student loan interest rates have been set to 0% and payments have been paused.
This pause can be extended several times as experts had warned that its ending could lead to unfavorable outcomes including a spike in missed student loan payments and delinquency. Legislators such as Patty Murray and Elizabeth Warren had urged President Biden to extend the student loan moratorium into 2022.
Murray stated that the pause on these loans has been a lifeline for several families in the Capital. It had helped the struggling families to keep a roof over their heads and bring food to their tables. Murray holds a chair at the Senate Health, Education, Labor, and Pensions Committee.
The Three Things That You Need To Know If You Have A Student Loan
The pause of the student loans is set to expire on the 31st of January. Experts have urged the borrowers to prepare for the payments to resume.
While each borrower’s circumstances vary, Ashley Boucher stressed that the biggest thing any borrower can do right now is to check their balances so they have all of the information they need to make the right decision for them. Ashley Boucher is the director of corporate communications for Sallie Mae.
Over 10 million of these borrowers will have switched their student loans from one servicer to another, before 2021 ends. Borrowers with loans serviced by The Pennsylvania Higher Education Assistance Agency, Granite State Management & Resources, and Navient will be impacted. Such transitions have always caused these borrowers headaches. These transitions were supposed to be seamless but it is not so, as stated by Kevin Walker. This is exactly why the borrowers need to pay attention.
Walker explains that servicers should notify borrowers if their loans have been transferred but many borrowers miss this notification.
The Biden Administration is still looking into broad-based student loan forgiveness and some borrowers may be entitled to relief. The US Department of Education had announced a series of changes to the Public Service Loan Forgiveness Program. The PSLF allowed borrowers with federal direct loans who make 120 qualifying monthly payments while working full-time for a qualifying employer to have the remainder of their balance forgiven.
Qualifying employers include any federal, state, local or tribal government and not-for-profit organizations.
The biggest change that is announced is that the Department of Education will offer a limited waiver so that borrowers can have their payments counted, regardless of their loan type or repayment plans.