Sen. Melinda Bush | Facebook / Melinda Bush
Sen. Melinda Bush | Facebook / Melinda Bush
State Sen. Melinda Bush (D-Grayslake) celebrated the extension of the pause on student loan repayment through May 1, 2022, by posting the announcement on Facebook.
“Breaking: ED is announcing an extension of the pause on student loan repayment, interest, & collections through May 1, 2022,” the post read. “The pause will help 41 million borrowers save $5 billion per month while allowing the Administration to assess the impacts of the Omicron variant on student borrowers & provide additional time for borrowers to plan for the resumption of payments.”
She added, “Borrowers are encouraged to use the additional time to ensure their contact information is up to date & to consider enrolling in income-driven repayment plans to support a smooth transition to repayment. Find more at StudentAid.gov."
President Joe Biden made the formal announcement in a White House release. Biden said he had called for a pause in federal student loan repayments due to the economic toll of the pandemic. “That pause has given 41 million Americans badly-needed breathing room,” he wrote.
While he characterized the economic recovery as “one of the strongest ever,” he said that “millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments.”
While payments on federal student loans have paused, the Department of Education has been busy restructuring its student loan servicing. According to a report in Forbes, Navient accounts have been transferred to Maximus, a company that handles collections efforts on defaulted loans. Maximus’ new loan-servicing arm is called Aidvantage. Since many former students have not made a payment on their federal loans in nearly two years, they may not be aware of the change.
The Consumer Financial Protection Bureau suggests steps individuals can take during the pause to prepare for repayment options to resume. They include ensuring contact information is up to date, learning options if repayment is not affordable, and avoiding scams.
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