When do student loan payments restart?
Borrower balances have effectively been frozen for more than a year, with no payments required on federal loans since March 2020, when Congress first authorized the pause as part of one of its first major Covid relief packages.
The relief is even more significant for those who work in the public sector and may be eligible for loan forgiveness after 10 years. They are still receiving credit towards those 10 years of required payments as if they had continued to make them during the pandemic, as long as they are still working full time for qualifying employers.
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.
More relief unlikely
But those efforts don’t go far enough for some leaders in the Democratic Party — including Senate Majority Leader Chuck Schumer and Massachusetts Sen. Elizabeth Warren — who are calling for the broad cancellation of $50,000 per borrower.
Biden resists calls for debt cancellation
Since taking office, Biden has granted some loan forgiveness to defrauded borrowers who attended for-profit colleges by reversing a controversial Trump-era policy. The move leads to the cancellation of roughly $1 billion in student debt. The administration has also waived a paperwork requirement during the pandemic for disabled borrowers to receive approval for loan forgiveness.
