2022 Student Loan Forbearance Ends January – What Borrowers Need to Know

As the COVID-19 pandemic relief measures wind down, the federal student loan forbearance program, extended multiple times by the Biden administration, will officially end on January 31, 2022. This article breaks down what this means for borrowers and highlights the administration's broader efforts to make higher education more affordable.

Essential Points to Remember

• The student loan payment pause and 0% interest rate, initiated under the CARES Act, will conclude on January 31, 2022.
• Borrowers will receive notifications from Federal Student Aid and loan servicers before payments resume.
• At least 21 days prior to payment resumption, borrowers should expect billing statements or payment reminders.
• Biden’s administration is pursuing additional reforms to reduce student debt burdens, many requiring Congressional approval.

How the Student Loan Forbearance Worked

Enacted in March 2020 through the CARES Act, the student loan forbearance suspended payments on federal student loans held by the Department of Education, excluding certain FFEL, HEAL, and Perkins loans. The initial suspension was set to end September 30, 2020, but was extended multiple times, most recently until January 31, 2022.

During forbearance, borrowers benefit from:

• Paused loan payments without penalties
• A 0% interest rate on outstanding balances
• Halted collections on defaulted loans

What Happens When Forbearance Ends

Once forbearance ends, borrowers should prepare to resume payments. The Department of Education emphasizes updating contact information on loan servicer websites and StudentAid.gov to receive timely communication.

Borrowers will get a billing statement or payment notice at least 21 days before their first payment is due, helping them avoid missed payments or penalties.

Biden’s Broader Student Debt and Education Initiatives

Ending forbearance is just one step in President Biden’s agenda to tackle student debt and improve college affordability. His campaign outlined ten key proposals, many pending Congressional approval:

1. Tuition-Free Public Colleges: Making public colleges tuition-free for families earning under $125,000 and covering two years of community college for all students.
2. Expanded Pell Grants: Doubling Pell Grant maximums and broadening eligibility, including for Dreamers and formerly incarcerated individuals.
3. Income-Based Repayment Reforms: Reducing payments for low-income borrowers and forgiving balances after 20 years, with tax-free forgiveness.
4. Public Service Loan Forgiveness Overhaul: Simplifying and expanding forgiveness options for public servants and introducing new debt relief for national or community service.
5. Support for Under-Resourced Colleges: Federal grants to help institutions serving large populations of Pell-eligible students.
6. Streamlined Educational Pathways: Funding programs that align high school, community college, and workforce training to accelerate credential completion.
7. Work-Study Program Enhancements: Prioritizing job-related and public service roles in federal work-study opportunities.
8. Regulation of For-Profit Colleges: Holding for-profit institutions accountable and protecting students from deceptive practices.
9. Private Loan Bankruptcy Relief: Allowing private student loans to be discharged in bankruptcy to ease borrower burdens.
10. Veteran Benefits Protection: Strengthening safeguards for post-9/11 GI Bill recipients against predatory lenders.

Public Service Loan Forgiveness Program Updates

The Department of Education is actively reforming the Public Service Loan Forgiveness program to expand eligibility and simplify forgiveness processes, including a temporary waiver to count payments from various federal loan programs.

Focus on Community Colleges and Minority-Serving Institutions

Community Colleges and Workforce Training

Biden’s proposals include funding two years of community college tuition and investing $50 billion in workforce training partnerships designed to equip students with in-demand skills and recognized credentials. Additionally, $8 billion would improve community college infrastructure and technology.

Support for Minority-Serving Institutions (MSIs)

The administration plans to allocate $18 billion in grants to MSIs, including historically Black colleges and universities (HBCUs), tribal colleges, Hispanic-serving institutions, and others. Investments aim to establish centers of excellence, upgrade research facilities, and boost student success metrics.

Recent relief efforts have already provided billions in funding and debt forgiveness to HBCUs, demonstrating ongoing commitment.

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