Many companies featured on Money advertise with us. Opinions are our own, but compensation and
in-depth research determine where and how companies may appear. Learn more about how we make money.

Published: Mar 16, 2022 10 min read
People protest for Student Debt cancelation
Getty Images

Student loan borrowers are back in limbo, preparing for their monthly payments to resume as buzz builds around the possibility of another extension.

If that sounds familiar, it's because we've been here before: Federal student loan payments have been paused, and interest has been waived, since March 2020. In the two years since, the deadline of that forbearance period has been pushed back five times.

The payment pause is now set to end May 1. But recent comments and actions from President Joe Biden's administration have some experts believing — and many borrowers hoping — that another extension of the pause is on the horizon.

It would be a popular move for many. Roughly half of likely voters, including 67% of Democrats and 39% of Republicans, support a further extension, according to a survey released Wednesday by Morning Consult. An earlier survey, by Consumer Affairs, found 68% of respondents believe the pause will be extended again, while 55% believe their loans will ultimately be forgiven.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
Take control of your student loans today!
Refinancing your Student Loans could save you money on interest, help pay off your loan faster and even free up extra cash in your budget. Why wait? Click on your state to get started today!
HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas
Refinance My Loans

Signs of another extension of the student loan pause

Earlier this month, White House Chief of Staff Ron Klain hinted at the possibility of another extension in an interview on the Pod Save America podcast.

“I think the president’s going to look at what we should do on student debt before the pause expires, or he’ll extend the pause,” Klain said.

“The question of whether or not there’s some executive action on student debt forgiveness when the payments resume, is a decision we’re going to take before the payments resume,” he added.

That's quite a different tone from the one the administration took last fall, when the White House explicitly stated it would not extend the pause past Jan. 31. (The administration ultimately changed its tune in December amid surging COVID-19 cases.)

Another indication that the current extension won’t be the last: Last week, Politico reported that Education Department officials instructed student loan servicers to hold off on sending any notices to borrowers about their payments restarting.

The CARES Act, which made the temporary forbearance official, requires that six notices be sent to borrowers telling them when normal payment obligations will resume and what options they have if they can't afford their payments. So the department’s hesitation to begin sending notifications when the forbearance is scheduled to end in just six weeks is a sign that an extension may be around the corner.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer

The end of the student loan forbearance is around the corner!

  • Days
  • Hours
  • Minutes
  • Seconds

Until 12:00pm PST, September 01, 2022

Student Loan Refinancing can lower interest rates and help pay off debt quicker. Click on the button above to start refinancing today!

Do borrowers need another extension?

Many borrowers would argue that extending the pause is necessary. One recent survey by Data for Progress found that 38% of borrowers are "not at all confident" in their ability to repay their loans once payments resume.

Yet critics of continuing the forbearance period argue there's no real economic need for payments to be paused further. Mark Kantrowitz, a student loan expert and author of the book How to Appeal for More College Aid, points out that unemployment rates have normalized, as have delinquency and forbearance rates for borrowers who are not eligible for the payment pause and interest waiver.

Meanwhile, loan servicers have increased call center staff and expanded hours in preparation for payments to restart. Education Department officials have stated they will help borrowers ease into the transition by not reporting missed payments to credit reporting agencies. Plus, servicers have planned for targeted outreach to at-risk borrowers. Kantrowitz argues there isn’t a whole lot more that can be done to get ready.

“Undoubtedly, a few borrowers will experience financial difficulty, but no more so than before the pandemic,” Kantrowitz says. “In a way, the restart of repayment is similar to the start of repayment at the end of the 6-month grace period, when borrowers have gotten used to ignoring their loans for a while after they graduate.”

In fact, while the latest extensions have been welcomed by borrowers, they've created logistical headaches for the Education Department and servicers, particularly as it relates to communicating with borrowers about resuming payments. Another extension may only add to those problems.

“Nobody is going to believe them when they say that repayment will restart when they set a new expiration date,” Kantrowitz says. “They've cried wolf too many times.”

That said, the law that gives the president authority to pause student loans — the HEROES Act — allows him to do so as long as there is an official state of emergency, according to Robert Farrington, founder and CEO of The College Investor, a website that focuses on finances for student loan borrowers.

It’s the same law that allowed Biden's Education Department to put in place a temporary Public Service Loan Forgiveness (PSLF) waiver, that should make it easier hundreds of thousands of eligible workers to have their loans canceled.

“That waiver program and the current state of emergency run through October 2022, so it would make sense that the student loan forbearance is extended to that point in time as well,” Farrington says.

But that would mean turning payments back on right before the midterm elections in November, which would likely be unpopular with any Democrats on the ballots.

“The most recent extension to the payment pause and interest waiver appears to have been driven by politics, not policy,” Kantrowitz says. And the same could be said for any future extensions.

What about student loan forgiveness?

Biden said in the past that he's open to forgiving $10,000 in student loan debt per borrower. However, he hasn’t pursued such a program so far. Part of the problem is that there’s a big question mark around the legality of doing so. He has, however, forgiven more than $13 billion in student debt through more targeted initiatives and changes to existing forgiveness programs.

Even so, Klain comments suggest that the possibility is still being considered. If the federal government were to forgive some student loans, Kantrowitz says they'd likely want to do so before the payment pause and interest waiver expires. After all, it wouldn’t make much sense to restart repayment in May only to forgive a large chunk of that debt a few months later.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
Pay less on Student Loans. Get more out of life.
Lower your interest rate or reduce your monthly payment.
Refinance My Student Loans

What borrowers should do in the meantime

All of this uncertainty leaves borrowers with a lot of questions. But Farrington says that whether student loan payments resume in May or at a later date, it won’t hurt for borrowers to get ready now. “This means getting organized with your loans,” he says.

For instance, it’s a good idea to check whether your loan servicer changed recently (it has for roughly half of borrowers). If so, make sure your contact information is updated so you receive important communications and updates.

Farrington also recommends spending some time tracking down all of your loans, double-checking which repayment plan you’re on and preparing your budget for that extra monthly expense. “Also, if you had autopay set up…you’ll need to re-enter that information as well,” he said.

In other words, borrowers should be proactive about their loans and get ready to pay them by May 1 — until they hear otherwise, anyway.

What borrowers should do in the meantime

All of this uncertainty leaves borrowers with a lot of questions. But Farrington says that whether student loan payments resume in May or at a later date, it won't hurt for borrowers to get ready now.

"This means getting organized with your loans,” he says.

For instance, it’s a good idea to check whether your loan servicer changed recently. If so, make sure your contact information is updated so you receive important communications and updates.

Farrington also recommends spending some time tracking down all of your loans, double-checking which repayment plan you’re on and preparing your budget for that extra monthly expense. Borrowers who had their bills set to autopay also need to opt back into that system.

In other words, borrowers should be proactive about their loans and get ready to pay them by May 1 — until they hear otherwise, anyway.

More from Money:

A Pandemic Relief Program Offered Struggling Student Loan Borrowers a Lifeline. Most Never Knew About It

Why Hasn't Joe Biden Forgiven All Your Student Loan Debt? Short Answer: He Never Promised To

Public Service Loan Forgiveness: 5 Steps to Getting Your Student Loans Canceled Under the Temporary Waiver