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4 Key Dates Student Loan Borrowers Need to Know About

It is an unprecedented time for student loan borrowers in America.

On the one hand, millions of borrowers have not had to make a payment on their student loans in over two years, leading many to completely push the idea of student loan repayment out of their minds. At the same time, new initiatives by the Biden administration are allowing millions of borrowers to access student loan forgiveness programs that they may not have qualified for before — some of which are only available temporarily.

In this context, keeping track of everything can be a struggle. But if the last two years have been a weird time for student loan borrowers, the next several months might be even crazier. Here are some key dates and deadlines that borrowers should be aware of.

December 31, 2022: End of the student loan pause

Editor's note: After this post was published, the student loan pause was extended to around August 30, 2023, unless courts rule on student loan relief lawsuits sooner.

Since the Covid-19 pandemic began in March 2020, the Department of Education has suspended all payments on government-held federal student loans, frozen interest and stopped all collections efforts against defaulted federal student loan borrowers.

This relief was initially codified into law by Congress via the CARES Act – emergency stimulus legislation signed by President Trump in March 2020. While the student loan pause was supposed to last six months under the CARES Act, the Trump administration issued multiple short-term extensions, which President Biden continued after he took office. Biden’s most recent extension is set to expire at the end of August. If it does, borrowers would start getting billed sometime in September.

But there are growing signs that yet another extension of the student loan pause may happen. Last month, Secretary of Education Miguel Cardona promised in an interview that borrowers would have “a long on-ramp with clear information” before repayment resumes. At this point, with only a little more than eight weeks remaining until the payment pause ends, a long on-ramp seems increasingly less possible.

White House Press Secretary Jen Psaki subsequently told reporters that the administration would “continue to assess” key economic measures “including costs and inflation” before deciding whether to resume student loan repayment in September. With inflation and key consumer prices continuing to rise, the administration may not want to force an additional monthly bill on 40 million Americans.  

There are other considerations, including the upcoming midterm elections and the fact that millions of student loan borrowers are continuing to experience loan servicing changes. Borrowers on track for Public Service Loan Forgiveness (PSLF) are only now being transferred from FedLoan Servicing to MOHELA, which will be taking over the program. Those transfers are not expected to be completed for another few months.

October 31, 2022: End of the Limited PSLF Waiver

Last October, the Education Department announced the creation of the Limited PSLF Waiver program. The initiative was designed to address serious administrative problems that had plagued the Public Service Loan Forgiveness (PSLF) program for years. Under the Limited PSLF Waiver, the Education Department has relaxed the rigid (and often poorly-communicated) PSLF eligibility rules to retroactively count past loan periods that would have previously been rejected. This includes payments made under ineligible repayment plans, as well as payments made on ineligible federal student loans.

The Biden administration expanded the waiver even further last April through a separate IDR Adjustment initiative, which will also allow specific periods of deferment and forbearance to count towards PSLF, as well.

Related: Education Department Updates Guidance on New Changes to PSLF and Income-Driven Repayment

But the Limited PSLF Waiver is temporary and is scheduled to end on October 31, 2022. Some borrowers may need to take action by then, such as consolidating their FFEL-program loans via the Direct consolidation program, or submitting PSLF Employment Certification forms if they have not already done so. Since these processes can take several months, time is running out for borrowers to act.

Several student loan borrower advocacy groups and labor unions have called on the Biden administration to extend the Limited PSLF Waiver beyond October. But so far, there are no signs that this is under serious consideration.

January 1, 2023: Implementation of the IDR Adjustment

The Income Driven Repayment (IDR) Adjustment announced in April won’t just benefit PSLF borrowers. The massive initiative will allow borrowers to get any past period of repayment, and many past periods of deferment and forbearances, counted towards a 20 or 25-year loan forgiveness term under IDR plans. According to the Department of Education, “Any borrower with loans that have accumulated time in repayment of at least 20 or 25 years will see automatic forgiveness, even if you are not currently on an IDR plan.”

As with the Limited PSLF Waiver, borrowers with commercially-held FFEL Loans would need to consolidate those loans via the federal Direct consolidation loan program to benefit from the IDR Adjustment. And according to the Department of Education, borrowers must consolidate “before we complete implementation of these changes, which is estimated to be no sooner than January 1, 2023.”

The Department of Education is also planning on rolling out IDR tracking information for borrowers, which should also be available around that time.

Related: 4 Big Student Loan Developments to Watch This Summer

July 2023: New regulations for IDR, PSLF and other federal student loan programs

Last year, the Education Department completed a round of negotiated rulemaking – a process through which the administration can overhaul regulations governing key programs. Through this process, the Department tries to reach consensus among key stakeholders so that everyone is on board with new changes. But if no consensus is reached, the Department can forge ahead with its own plan.

The Department held negotiated rulemaking sessions on a proposed new IDR plan, as well as some significant changes to PSLF (such as making permanent certain aspects of the Limited PSLF Waiver). But the negotiated rulemaking committee was unable to reach a consensus on the proposed changes. As a result, the Department is moving forward and working on creating new regulations for a new IDR plan and an overhaul of PSLF (as well as other federal student loan programs).

No details have been formally announced yet, but the Department expects the new regulations to be finalized by July next year. Depending on the scope of these changes, this could result in significant impacts for millions of borrowers.

Not sure what to do with your student loans?

Take our 11 question quiz to get a personalized recommendation for 2024 on whether you should pursue PSLF, Biden’s New IDR plan, or refinancing (including the one lender we think could give you the best rate).

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Comments

  1. Kathy Knapp July 7, 2022 at 3:59 PM
    Reply

    Are parent plus loans eligible for any of theses potential positive changes?

    • Nathalia at Student Loan Planner July 18, 2022 at 3:00 AM
      Reply

      Hi Kathy,

      Alone Parent Plus loans do not qualify for forgiveness, but I would recommend taking a look at the Parent PLUS double consolidation loophole: https://www.studentloanplanner.com/parent-plus-double-consolidation/

      You should watch the accompanying video in that article to see how it works.

      Hope this helps.

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