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Student Loan Borrowers Face Changes in 2022



Editors Note: Since the writing of this article, the federal Student Loan Debt Relief program has been blocked and the Department of Justice has filed an appeal with the Supreme Court. While the case is being reviewed, the Biden administration is extending the federal student loan payment pause into 2023. The US Department of Education announced loan repayments may resume as late as 60 days after June 30, 2023.

Ever since the pandemic, federal student loan borrowers have had a break. Interest rates on federal student loans have been set at 0% and repayments have been put on hold. That is expected to change in 2022 as those moratoriums are set to expire on August 31. At that point, millions of borrowers will have to resume making payments.

To prepare, borrowers are encouraged to make sure they know how much they owe. They can then devise a plan to make payments each month or seek help if they are not able to pay.

Millions of Borrowers Get a New Servicer

Resuming repayments is not the only change coming. Also, more than 10 million student loan borrowers will have a new student loan servicer (the company the federal government hires to take care of billing and payments). The Department of Education announced this fall it was changing the servicers it worked with due to stricter guidelines. Borrowers with loans at Navient, Granite State Management & Resources, and the Pennsylvania Higher Education Assistance Agency will have a new loan servicer next year.

While borrowers are supposed to be notified of the change, many may miss the letter or email. That could create problems if it results in missed payments. To prevent that from happening, federal student debt holders are encouraged to check the status of their loan and who their servicer is through the Federal Student Aid website.

More Loan Forgiveness Is Coming

The Department of Education is also making it easier to get eligible student loans forgiven in 2022 thanks to recent changes to the Public Service Loan Forgiveness (PSLF) program. Borrowers hoping to take advantage of PSLF must work for a qualified government organization (municipal, state, or federal organizations count) or a qualified 501(c)(3) organization, and they must make 120 on-time loan payments to be eligible for loan forgiveness.

Prior to the changes, the program was only available to borrowers who had Direct Loans from the government. And while borrowers were able to consolidate their debt into a Direct Loan, previous payments made on the pre-consolidation debt were not counted toward the PSLF program. Now payments count toward PSLF regardless of loan type or repayment plan.

With the change, more than 550,000 borrowers will have to make an average of 23 fewer payments to achieve loan forgiveness. It will also make 22,000 student loan borrowers eligible for immediate loan forgiveness.

Next year has a few changes in store for student loan borrowers. A little preparation will go a long way in making it a smooth transition.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.


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