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Student Loan Payments Now Paused Until 2023: Everything to Know About the Latest Extension

President Biden says this most recent continuance of the student loan payment pause will be its final extension.

piggy bank wearing a grad cap and sitting on piles of fake money
The pause on federal student loan payments began on March 13, 2020.
Brian A. Jackson/Getty Images

In addition to forgiving up to $20,000 in student debt for qualified borrowers, President Joe Biden announced he was extending the current moratorium on student loan payments and interest until Jan. 1, 2023.

Student loan payments have been paused since March 2020, when the CARES Act was passed by Congress. They were set to resume in Sept. 2020 but the freeze was extended three times by former President Donald Trump and now a total of four more times by Biden.

Here's what you need to know about federal student loan payments, including which loans are paused, what happens to borrowers who are in default, and whether there will be any further student loan payment pauses.

For more on student debt, find out if you qualify for a public student loan forgiveness waiver, if you should keep paying off your loan during the pause, and the benefits (and drawbacks) of refinancing your student loan.

Which student loans are currently paused?

The moratorium on student loan payments and interest includes all federally held student loans, regardless of what company is servicing the loan. Eligible student loans include:

  • Direct federal student loans
  • Federal Family Education Loan program loans held by the Department of Education, aka FFEL
  • Federal Perkins Loans held by the Department of Education
  • Defaulted FFEL loans not held by the Department of Education
  • Defaulted Health Education Assistance loans, aka HEAL

Student loans that are not eligible include:

  • Nondefaulted FFEL loans not held by the Department of Education
  • Federal Perkins Loans not held by the Department of Education
  • Nondefaulted HEAL loans
  • Private student loans

If your student loans are eligible, payments and interest were automatically paused on March 13, 2020. If you're not sure whether your loan payments are paused or not, contact your loan servicer.

Will the student loan payment freeze be extended again?

The pause on federal student loan payments is slated to expire on Dec. 31, 2022, with payments expected to resume on Jan. 1, 2023. Nothing is set in stone, but in his announcement, Biden said he was continuing the moratorium "one final time" to the end of the year.

Some industry experts had predicted Biden might extend the payment moratorium until July 2023, the earliest point at which federal student loan programs could be overhauled. However, Wednesday's announcement of $10,000 to $20,000 of widespread student loan forgiveness likely preempts any further extensions.

In addition, private servicers of federal student loans have lobbied to end the payment moratorium this year.

Will there be any more student debt forgiveness? 

Judging by the length of time it took Biden to make a decision on widespread student loan debt forgiveness, it's unlikely that any further forgiveness will be given to all student loan borrowers via executive order. It's not clear yet if Biden's current order to cancel $10,000 to $20,000 for all federal student loan borrowers will be challenged in court or if anyone even has the standing to file a lawsuit against it.

The political climate on student loan debt forgiveness is likewise murky: An Ipsos/NPR poll found that a majority of Americans approve of canceling $10,000 of student loans, but support for forgiveness decreased at higher levels of relief. In addition, 59% of Americans are worried that student loan forgiveness will make inflation worse.

According to a separate CNBC/Momentive survey from early August, nearly a third of respondents (30%) opposed student loan forgiveness for anyone.

While further widespread student loan debt forgiveness is unlikely, the Department of Education continues to discharge loans of specific borrowers -- the agency has canceled $32 billion of student loans during Biden's term. Following temporary changes to the Public Service Loan Forgiveness program in October 2021, more than 175,000 borrowers have had their student loans extinguished, totaling more than $10 billion as of August 2022. 

Members of Congress have proposed the Simplifying and Strengthening PSLF Act, which permanently codifies the changes to the PSLF program, but it's not clear whether the measure has enough support to pass. Otherwise, the temporary changes to PSLF will expire Oct. 31, 2022.

The Department of Education has also discharged loans to students from certain colleges. On Aug. 4, a federal judge preliminarily approved a settlement that would give $6 billion in debt relief to roughly 200,000 borrowers who say they were defrauded by colleges like Lincoln Tech, American National University and Keiser University.

What happens to borrowers who were in default?

Borrowers in default will automatically be given a "fresh start," according to the US Department of Education. All defaulted accounts will be returned to good standing, and any delinquencies will be "cured," allowing borrowers to repair their credit and access programs like income-driven repayment plans and Public Service Loan Forgiveness, a student loan relief program designed for borrowers who work for the government or nonprofit organizations.

Since the federal student loan payment pause began in March 2020, collections on defaulted debts have been put on hold.

In an April 2022 statement, Secretary of Education Miguel Cardona said, "During the pause, we will continue our preparations to give borrowers a fresh start and to ensure that all borrowers have access to repayment plans that meet their financial situations and needs." 

Correction, Aug. 26: This story earlier misstated that Keiser University is a for-profit school. Keiser University converted from for-profit to nonprofit status in January 2011.