All Consuming - Financial Litigation Insights, Volume 2, Issue 16

President Biden Extends Pause on Student Loan Payments to 2022 -

"Student loan payments have been paused since Congress passed the CARES Act in March of last year but were due to resume in September."

Why this is important: At the start of the pandemic in March 2020, student loan payments on certain federally backed student loans were paused: borrowers were not required to make payments and interest did not accrue on qualifying loans. Initially set to expire in September 2020, the moratorium on payments has been extended several times. On Friday, another extension was made, and the payment pause has been extended to January 31, 2022. “The Education Department described it as a ‘final extension of the pause’ in the official announcement Friday afternoon.” The language used by the government is telling, and both borrowers and servicers are now on notice that repayments will begin with no additional extensions. Servicers need to plan for restarting account servicing for more than 40 million federal student loan borrowers at the same time and for a potential deluge of assistance requests by borrowers.

Please see full publication below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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