Washington (CNN)President-elect Joe Biden will direct the Department of Education Wednesday to extend the suspension of federal student loan payments and interest.
Borrowers will not have to make payments until October 1 at the earliest, extending the already unprecedented pause on payments by eight months.When the economy began to shut down in response to the pandemic in March, Congress passed a sweeping relief bill that automatically suspended student loan payments and waived interest. The benefit was originally set to expire in September, but was extended by the Trump administration until January 31.Both the pause on payments and interest waiver is automatic, but only applies to federally held loans.That covers roughly 85% of all federal student loans, including those known as direct federal loans and PLUS loans that parents have taken out on behalf of their children. It excludes some federal loans that are guaranteed by the government but not technically held by it. Generally, those were disbursed prior to 2010.Balances were frozen in March 2020, though borrowers are allowed to continue making payments. Those enrolled in the Public Service Loan Forgiveness payment plan will still receive credit as if they had continued paying, as long as they are still working full time for qualifying employers.
Source: Student loans: Biden will extend payment deferrals until October – CNNPolitics
