In March of 2020 everything changed in the world as we knew it.  Everything closed down.  Masks were pervasive.  Toilet paper was a hard-to-find commodity.  And my least favorite task was bathing the groceries.  But as the pandemic moved forward, we learned more about the virus.  Treatments and preventative vaccines were created.  And now everything feels a lot more like normal.  Well….almost everything.  Student loan repayment seems even more up in the air now than it did at the beginning of the pandemic.

In March 2020 the President announced a pause on federal student loan repayment, as well as setting the interest rate on all Federal Direct Student Loans to 0%.  This was supposed to last for a few months, until the public health emergency had passed.  But we all know now that the public health emergency did not end after a few months.  And neither did the loan repayment pause.  The pause has been extended several times.  It really looked like repayment (and the accrual of interest) was going to resume in January 2023.  It was supposed to coincide with the processing of loan relief in the form of up to $20,000 in forgiveness for qualifying borrowers.  But that loan forgiveness program got all tangled up in law suits and we’re really not sure when that will be resolved.  So the pause was extended yet again.  And this time the end date is a moving target.

Last week the U.S. Department of Education announced that the payment pause would end sixty days after a) they are allowed to implement the debt relief program, or b) the litigation is resolved.  If neither of these things happens by June 30, 2023, then repayment (and the accrual of interest) will resume 60 days after that.

Clear as mud?  Yep.  I have long thought that the federal student loan programs are too complicated for the average borrower to understand thoroughly.  There are too many different repayment plans.  There are origination fees deducted from loan amounts that make borrowing less transparent than it ought to be.  Loan servicers have a known history of not being up front with borrowers when they call with questions.  Loans come with something called a “variable fixed” interest rate, so each year brings a new loan with a different interest rate from prior loans.  And these interest rates are much higher than rates on car loans or home mortgages, which is very discouraging. It’s hard for me to keep up with all of the details, and I spend my whole life living in the student loan world.  I can’t imagine how intimidating it must be to a brand new college freshman.

But here we are.  Student loans were complicated enough before our country started using student loan borrowers as political punching bags.  Borrowers are now caught in the crossfire of arguments about many different policies.  I’m still not sure how I feel about the proposed debt relief program currently tied up in the courts.  But I feel very strongly that student loan borrowers shouldn’t be made to suffer because of the political battles of others.  And I guess that’s why the payment pause was extended yet again.

Will this be the last extension of the pandemic payment pause?  Only time will tell.  But if there is something to know, you can be sure I’ll share it here when that time comes.