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Financial Services Law Insights and Observations

Education Dept. extends student loan moratorium

Federal Issues Student Lending Covid-19 Agency Rule-Making & Guidance Department of Education

Federal Issues

On December 22, the Department of Education announced a 90-day extended pause on student loan repayment, interest, and collections through May 1, 2022, which will allow the Biden Administration “to assess the impacts of the Omicron variant on student borrowers and provide additional time for borrowers to plan for the resumption of payments and reduce the risk of delinquency and defaults after restart.” As previously covered by InfoBytes, in August 2021, President Biden announced the extension of the moratorium on collecting student loans until January 31, 2022. According to the Department, the extended pause will assist 41 million borrowers in saving $5 billion per month and “[b]orrowers are encouraged to use the additional time to ensure their contact information is up to date and to consider enrolling in electronic debit and income-driven repayment plans to support a smooth transition to repayment.”

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