Student Loans Will Restart February 1, But Here’s How Biden Plans To Help

President Joe Biden (Photo by Scott Olson/Getty Images)


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Student loan payments will restart February 1, 2022, but here’s how President Joe Biden plans to help.

Here’s what you need to know — and what it means for your student loans.

Student Loans

Despite repeated pleas from progressives in Congress, advocates and student loan borrowers, the Biden administration will end student loan relief from the Covid-19 pandemic effective January 31, 2022. That means for your federal student loan payments will be due again starting February 1, 2022. Progressives have sought to extend student loan relief or three months, six months, or until the end of the Covid-19 pandemic. They say failure to provide more student loan relief will cost student loan borrowers $85 billion, damage the economy, and cause financial ruin for a generation of Americans. (Here’s a list of everyone who wants Biden to extend student loan relief). The Biden administration, which plans to release more details on its plan to restart student loan payments, says that this student loan relief has always been temporary and student loan borrowers have had nearly two years of substantial student loan relief and student loan cancellation. This is in addition to the $12.7 billion of student loans that Biden has cancelled since becoming president. Here are several ways that Biden may help student loan borrowers as they restart student loan payments. (No, Biden won’t extend student loan relief again).

1. Give student loan borrowers a grace period

When student loan payments restart on February 1, it’s important to note that your student loan payments are necessarily due on that date. Check with your student loan servicer to confirm when your student loan payment is due. It’s possible that Biden may grant student loan borrowers a one-time grace period for up to 90 days when student loan payments restart. (Why Biden ended student loan relief). Therefore, if you make a late student loan payment or pay the wrong balance, your credit report won’t take a hit. Rather, you may be placed on temporary forbearance during this grace period. The goal is to help smooth the transition into the restart of repayment after a 22-month hiatus.


2. Provide direct outreach to student loan borrowers in need

The U.S. Department of Education has already contacted certain student loan borrowers who are one of the nearly 16 million student loan borrowers who may have a new student loan servicer next year. Student loan servicers such as Navient are exiting federal student loan servicing, which means you may start making federal student loan payments to a new company starting next year. The Education Department also may be reaching out to other borrower constituencies such as those who recently graduated, borrowers in student loan delinquency or student loan default, or borrowers with student loans who didn’t complete a college degree.


3. Offer more customer service

“Student loans” and “customer service” may not be the best of friends, but the Education Department expects a surge in questions and requests from student loan borrowers as student loan repayment restarts in February. As such, expect student loan servicers to have increased customer service and perhaps longer hours to provide more student loan support.


4. Cancel student loans for borrowers in student loan default?

Sen. Elizabeth Warren (D-MA) and her colleagues have appealed to the Biden administration to cancel student loans for the approximately 7 million student loan borrowers who are in student loan default on their federal student loans. These student loan borrowers, many of whom struggled financially before the Covid-19 pandemic, may still be suffering financial setbacks. As such, additional student loan relief, which may include student loan cancellation, may be a potential option. (Biden will cancel student loans for millions of borrowers, but Congress hasn’t passed any legislation).


5. Simplify income-driven repayment plans and ease the process

When student loan payments restart, student loan borrowers will have a bevy of options from which to choose. For example, federal student loan forbearance and deferment will be possibilities for borrowers who are struggling financially. A better option may be to enroll in an income-driven repayment plan such as IBR, PAYE, REPAYE and ICR. Your monthly student loan payment for your federal student loans, which will be based on your discretionary income, family size and state of residence, could be as low as $0 a month. For a limited period, the Biden administration may permit student loan borrowers to self-certify income and family size. This may help ease an administrative burden for borrowers while they navigate the restart of student loan payments. With income-driven repayment, borrowers can also get student loan cancellation after 20 or 25 years. (How to qualify for automatic student loan forgiveness).


Don’t expect student loan cancellation before the end of student loan relief

Despite the latest headlines on student loan cancellation, don’t expect Biden to enact wide-scale student loan cancellation before the end of student loan relief. It won’t happen. If student loan cancellation in the next month is your main strategy for student loan repayment, it’s time to reassess for strategy. Biden will continue to cancel student loans on a targeted basis. For example, the Education Department will cancel $2 billion of student loans in the coming weeks. It’s also possible to apply for public service loan forgiveness or borrower defense to repayment, for example, to get partial or total student loan cancellation. However, don’t expect $50,000 of student loan cancellation, $10,000 of student loan forgiveness or any other amount for all student loan borrowers.

Now is the time for you to take control of your student loans. Make sure you understand all your options for student loan repayment.

Here are some popular ways to save money and pay off student loans faster:


Student Loans: Related Reading

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Biden won’t cancel student loans before student loan relief ends

How to qualify for automatic student loan forgiveness

Education Department will cancel $2 billion of student loans