Student center

Four-month extension of student loan payment suspension begins May 1

BALTIMORE — Many people with federal student loan debt dreaded Sunday, May 1 because until a few weeks ago that was the date when payments on their student loans were due to resume after a two-year pandemic pause.

Since these student loan repayments are on hold again, payments won’t have to be made until September 1, but borrowers won’t have to wait four months before taking action.

Ben Franklin said that nothing is certain in this world except death or taxes, two things that people cannot escape. However, after the extended pause in payments ends in four months, anyone with a federal student loan can also add it to the list, especially those in default.

Dr. Tisa Silver Canada, Founder and Director of the Maryland Center for Collegiate Financial Wellness, said, “We are talking about people who have missed payments for at least nine months and after a two-year break they remain in student loan default. . So part of this break that’s different from the previous break is this fresh start that’s supposed to be extended to students who remain in student loan default.

Canady helps borrowers navigate the student loan application and payment process.

“I just like people to remember that even though we see that overall things are moving very well, there are still large groups of people who are struggling and who will appreciate this relief and hopefully use it. time to come up with a plan to make their student loan repayments will be sustainable when they resume,” Canady said.

Canady is advising people to use the four-month payment pause extension to be proactive. Borrowers should ensure that each of their loan servicers has their correct and up-to-date contact information for resuming payments.

Borrowers with federal student loans might consider loan consolidation. Anyone with a combination of federal and private student loans should refinance their loans.

According to, the advantages of loan consolidation include having only one payment, avoiding defaults, having a fixed interest rate, and the possibility of lower payments. However, the disadvantages include paying more interest over time, losing some benefits such as restarting the clock on the duration of payments made, and a shorter grace period of around six months to two. to start paying it back.

A major drawback is that borrowers can only consolidate once. Interest rates go up, but if they were to go down after loan consolidation, borrowers would be stuck and locked into the higher rate.

Depending on their work history, some borrowers could also use the next four months to apply for a limited waiver option on public service loan forgiveness.

“In the almost four years that borrowers have been planning the Civil Service Loan Forgiveness Program, I think they are about 16,000 out of 1.3 million who have been approved since the waiver came in. effective last year in October. That number has grown to over 80,000…80,000 people who can have their debts forgiven just through waiver,” Canady said.

To qualify, a loan must have had at least ten years or 120 payments due, while the waiver eliminates any late or missed payments within that ten-year period.

Borrowers who both worked for a qualified civil service employer and had a loan in repayment at the same time, may be eligible to have all of their student loan debt forgiven.

“It’s just about going back and removing some of the barriers, especially the small barriers like making a payment late, making a payment that was missing a penny instead of treating those payments as ineligible. They just say you know what, we’re not even going to look at the payments, we’re just going to look at the status of the loan. And, if the loan status indicates repayment, we will allow those months to count,” Canady said.

Canady also recommends that current students complete the Free Application for Federal Student Aid (FAFSA) for each year while they are in school.

“And beyond the federal government, take a look at the state government. The Maryland Higher Education Commission also offers numerous scholarships and grants, many of which are tied to the type of degree or credential a student is pursuing. Take a look at state government and also look around community organizations and get those scholarship dollars together so maybe they don’t have to rely so much on student debt,” said Canada.

For those in need of a loan or who already have student loan debt over their heads, the Maryland Center for Collegiate Financial Wellness offers a free virtual clinic called “Office Hours,” twice a month on Facebook and Zoom.

“We’re developing programs and partnering with institutions across the state and just trying to reach as many students and families as possible so we can put them on the path to learning those financial skills, and not only to cope, but to empower them. thrive,” Canady said.

Borrowers should check all the terms and conditions of their loans before making any changes or asking for help if there is anything they don’t understand.

Borrowers with private loans such as FFEL or Perkins loans can have their loan balances paid off, consolidated into a new direct consolidation loan, and then get credit for loan forgiveness based on previous payments made on their private loans .

Tamiko Scian completed her graduate studies in 2002. She is now a management and program analyst for the federal government, but she is still paying her student debt, 20 years later. What started out as around $30,000 in student loans ballooned to over $80,000 in debt over time due to negative amortization.

Second, the new consolidation loans for Scian mean it no longer has to make payments of three to five hundred dollars a month.

“That’s a hell of a discount, just under $200 total, but it’ll be a hell of a discount from what I paid before Covid,” Scian said.

Now she is on the path to financial stability.

“I was able to refinance my house and went from an interest rate of 4.25% to 2.99%. I was then able to see my credit rating go up after that, and then I got some cash out and was able to pay off my car bill, which I’m really pleased with,” Scian said.

The Washington Post reports that the president hinted in a closed-door meeting with House Democrats this week that not only is he ready to extend the break again beyond the August deadline , but also considering an executive order canceling thousands of dollars in student loan debt for borrowers.

Meanwhile, five Republican senators introduced the Stop Reckless Student Loan Actions Act this week in an effort to stop the break from being extended and prevent any student loan debt from being forgiven.