Everyone loves a holiday, and the best holiday is one that saves you money! The Federal student loan interest holiday began on March 20, 2020, when the federal government suspended loan payments, stopped collecting on defaulted loans, and dropped the interest rate to zero on U.S. Department of Education-owned federal student loans. The temporary relief became law on March 27, 2020 and was scheduled to expire that year on September 20, 2020.
As the pandemic continued, the expiration deadline for student loan relief was extended several times, to Dec. 31, 2020, then Jan 31, 2021, then September 30, 2021, and is currently scheduled to expire on January 31, 2022.
The loan holiday brought some much-needed relief to those holding federal student loan debt, but some people might be wondering: Will the deadline be extended yet again?
It might be but the Biden administration has indicated that this will be the last extension. Government officials said they announced the extension with the intention to give clarity and certainty to borrowers and lenders — both of whom need time to prepare for the resumption of payments.
Education Secretary Miguel Cardona said in a statement, “As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment.”
Here are some steps you can take before the Federal Student Loan holiday ends:
The chief disadvantage of refinancing is that you’d lose access to government programs and benefits, like forbearance and income-based repayments. As a reminder, the Federal student loan interest holiday is one of these programs, so you’d be losing access to that, among other federal benefits and programs. For more information on federal student loan repayments, visit https://studentaid.gov/.
If you are considering refinancing your student loans now, you can read more here.
* Deposits are insured up to the maximum allowable limit. Laurel Road is a part of KeyBank N.A. All single accounts owned by the same person at KeyBank N.A. are added together and insured up to the maximum allowable limit. To learn more, contact the FDIC toll-free at 1.877.ASK.FDIC (1.877.275.3342) or visit www.fdic.gov.
Whatever you do, it’s a good idea to make sure make sure all your contact and banking info is up-to-date with your loan servicer and save as much money as you can for your future loan payments. All holidays eventually come to an end eventually, and this one will too, so be prepared!
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