With all the changes made regarding student loans, it can be difficult for borrowers to keep up with everything they need to know. That’s what we’re here for. We’ve rounded up five things you need to know about student loans in 2022.
Payments Ramp Up Again in May
Student loan payments are scheduled to begin again on May 1, 2022.
In late December, President Joe Biden extended the student loan payment pause through April 2022. That was helpful for many borrowers who might have struggled to find consistent work and pay off debt during the ongoing pandemic. The automatic student loan forbearance program was part of the CARES act COVID relief package passed by Congress in March 2020.
With the Omicron variant raging at the end of 2021, the extension will allow borrowers more time to regroup as they try to recover from the financial impact of the pandemic. According to a survey by the Student Debt Crisis Center conducted before the latest pause extension, 89% of fully-employed student loan borrowers said they were not financially secure enough to resume payments in February. Now they have an additional 90 days.
With the extension, borrowers might want to take advantage of The Penny Hoarder’s advice on how to be prepared to tackle that student loan debt payoff.
2. Changes in the Student Loan Servicing Industry
The last year was eventful for the student loan servicing industry. Around 15 million borrowers were affected when student loan servicers like FedLoan, Granite State, and Navient decided to pull out of the servicing business.
The timing could have certainly been better. With the ongoing payment pause, adding servicing changes only complicates what would already be a difficult situation for both servicers and borrowers when payments resume in May. The logistics involved in transferring millions of borrowers’ accounts to new servicers will put the industry to the test.
If you don’t know who your new servicer is, log in to studentaid.gov and look for the “my servicers” section. If you’re not sure how to log in, call the Federal Student Aid Information Center at 1-800-433-3243.
3. Public Service Loan Forgiveness Program
In the past, the federal forgiveness program has been plagued by poor communication and conflicting information from both servicers and the Department of Education. That said, the DOE announced late in 2021 that 550,000 borrowers will see “accelerated forgiveness” as part of a loan forgiveness overhaul.
That meant automatic student loan forgiveness for tens of thousands.
This is (crosses fingers) great news for borrowers who work in the public sector, are veterans or have qualifying disabilities. Prompted by the pandemic, the DOE promised to make “transformational changes” to the program that would bring those hundreds of thousands of borrowers closer to forgiveness.
