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Federal student loan forbearance given additional extension

Federal student loan forbearance given additional extension
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Education Secretary Betsy DeVos announced late Friday that the US government will extend a federal student loan forbearance on borrowers for an additional month as more businesses are closing due to a surge in coronavirus cases. This means that payments of federal student loans will not be due in January.

The decision does not impact private student loans, which have generally still required repayment by Americans during the pandemic.

While the federal student loan forbearance is scheduled to end on January 31, President-elect Joe Biden has discussed taking more permanent action on reducing the student loan burden on millions of Americans.

Federal student loans were placed on forbearance in March. In August, President Donald Trump directed DeVos to extend the forbearance through the end of 2020.

While those who wanted to continue making student loan payments were able to continue doing so, automatic payments of federal student loans stopped early in the pandemic as unemployment levels jumped to record levels.

Amid the forbearance period, the federal government was not charging interest on borrowers.

"The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been impacted," said DeVos. "The added time also allows Congress to do its job and determine what measures it believes are necessary and appropriate. The Congress, not the Executive Branch, is in charge of student loan policy."