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Student Loan Relief extended through Aug. 31, 2022

05/05/22

Author: ADP Admin/Monday, May 2, 2022/Categories: Compliance Corner

On April 6, 2022, President Biden announced an extension of the pause on student loan repayment through August 31, 2022.

The Details:

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act was the third stimulus bill aimed at providing relief to employers and individuals affected by COVID-19. One of the provisions of Act addressed federal student loans.

 

Under the CARES Act, payments on federal student loans, including direct loans, Perkins loans and Federal Family Education Loans owned by the United States Department of Education, were automatically suspended from March 13 through September 30, 2020. That meant eligible federal loan borrowers did not have to make payments. While loan payments were suspended, interest did not accrue. In addition, collection actions and wage garnishments for student loans ceased. Private student loans did not qualify for the relief.

 

Subsequently, relief was extended through December 31, 2020 and then again through January 31, 2021.

 

On January 20, 2021, President Biden via Executive Order extended the relief once again at least through September 30, 2021. During this time, payments for federal student loans were not required, the interest rate continued to be zero percent and collection actions including wage garnishments were suspended. As before, private student loans did not receive relief.

 

On August 6, 2021, it was announced in a statement by President Biden that the student loan relief measure described above would be extended through January 31, 2022.

 

On December 22, 2021, President Biden announced that student loan relief would be extended through May 1, 2022.

Latest Extension

On April 6, 2022, President Biden announced that student loan relief would be extended through August 31 , 2022. The President’s announcement stated in part as follows:

“If loan payments were to resume on schedule in May, analysis of recent data from the Federal Reserve suggests that millions of student loan borrowers would face significant economic hardship, and delinquencies and defaults could threaten Americans’ financial stability.

Accordingly, to enable Americans to continue to get back on their feet after two of the hardest years this nation has ever faced, my Administration is extending the pause on federal student loan repayments through August 31st, 2022.”

 

For a copy of the announcement please click on the link provided below.

https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/06/statement-by-president-biden-extending-the-pause-on-student-loan-repayment-through-august-31st-2022/

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