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Editor: and
Published: Apr 06, 2022 4 min read
Photo collage of a graduation cap with the tassel being replaced with a price tag made out of hundred dollar bills
Money; Getty Images

Millions of people who have fallen behind on their student loan payments just got some very welcome news.

In addition to extending the student loan pause — in place since spring 2020 — through Aug. 31, the U.S. Department of Education announced Wednesday that it's pulling borrowers who were in default pre-pandemic out of default. They will receive a "fresh start" on repayment by "eliminating the impact of delinquency and default and allowing them to reenter repayment in good standing," the department said in a statement.

Borrowers fall into default after missing nine monthly payments, after which they lose access to certain repayment plans and their accounts are sent to collections.