{"id":124392,"date":"2021-12-27T19:11:14","date_gmt":"2021-12-27T19:11:14","guid":{"rendered":"https:\/\/fin2me.com\/?p=124392"},"modified":"2021-12-27T19:11:14","modified_gmt":"2021-12-27T19:11:14","slug":"4-things-student-loan-borrowers-should-know-about-the-extended-payment-pause","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/4-things-student-loan-borrowers-should-know-about-the-extended-payment-pause\/","title":{"rendered":"4 things student loan borrowers should know about the extended payment pause"},"content":{"rendered":"<ul>\n<li>The Biden administration has extended the payment pause for student loan borrowers once again.<\/li>\n<li>Here&#x27;s what you need to know.<\/li>\n<\/ul>\n<p>Student loan borrowers got some happy news this holiday season: They&#x27;ll have an additional three months before they have to start making their payments again.<\/p>\n<p>The payment pause, which has been in effect since March 2020, was scheduled to expire Jan. 31, but the Biden administration announced it was extending the relief until May 1.<\/p>\n<p>Outstanding student loan debt in the U.S. has surpassed $1.7 trillion and burdens Americans more than credit card and auto debt. Around a third of borrowers are in delinquency or default. The average monthly payment is around $400 a month.<\/p>\n<p>Recent polling of student loan borrowers found that even among those who are fully employed by now,\u00a089%\u00a0are still not financially secure enough to restart payments.<\/p>\n<p>&quot;We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,&quot; President Joe Biden said in a statement last week.<\/p>\n<p>Here&#x27;s what you need to know.<\/p>\n<h2>1. Most loans won&#x27;t collect interest<\/h2>\n<p>Interest will remain suspended on federal loans in the Direct program. <\/p>\n<p>Experts recommend keeping a record of your balance before the beginning of the payment pause, so that you can make sure it hasn&#x27;t changed once bills resume in May.<\/p>\n<p><strong>More from Personal Finance:<\/strong><br \/>10 million children will fall into poverty when enhanced child tax credit ends<br \/>SALT deduction relief may be in peril as Build Back Better stalls<br \/>Backdoor Roth 401(k) and IRA rules for the wealthy survive \u2014 for now<\/p>\n<p>Holders of Federal Family Education Loans and private student loans are not covered by the policy, meaning their debt will continue to grow with interest.<\/p>\n<h2>2. Garnishment is still suspended<\/h2>\n<p>During the payment pause, the government has put on hold its enforcement activity against defaulted student loan borrowers.<\/p>\n<p>That means that those behind on their payments will be protected until May from garnishments of their wages, tax refunds and Social Security checks.<\/p>\n<h2>3. It doesn&#x27;t make sense for some to keep paying<\/h2>\n<p>Borrowers who can afford to may want to take advantage of the temporary suspension of interest to pay down their education debt&#x27;s principal.<\/p>\n<p>But there are exceptions.<\/p>\n<p>If you&#x27;re pursuing\u00a0public service loan forgiveness\u00a0or are on an\u00a0income-driven repayment plan, it&#x27;s a bad idea to continue making payments, experts say.<\/p>\n<p>That&#x27;s because the months of the payment pause count toward the eventual debt forgiveness these programs lead to \u2014 whether or not you&#x27;re paying, and so any money you direct to your loans during this reprieve just reduces the amount of forgiveness for which you&#x27;ll eventually be entitled.<\/p>\n<h2>4. In the meantime&#8230;<\/h2>\n<p>The Covid pandemic has taught us how important it is to have a healthy savings account to fall back on. People should try to build up at least six months&#x27; worth of expenses in cash, experts say. To get the best return on your money, keep it in\u00a0a high-yield savings account, experts say.<\/p>\n<p>With interest rates on most federal student loans at zero, it can also be a good time to make progress paying down more expensive debt. The average interest rate on credit cards is currently more than\u00a016%.<\/p>\n<p>However, make sure you have enough in your emergency savings account before you address credit card debt, said\u00a0Ted Rossman, an industry analyst at Creditcards.com.<\/p>\n<p>That&#x27;s because your credit limit shouldn&#x27;t be relied on as a safety net.<\/p>\n<p>&quot;Many people had their credit card limits cut unexpectedly over the past year as lenders got especially worried about risk,&quot; Rossman said.<\/p>\n<p>Source: <a href=\"https:\/\/www.cnbc.com\/2021\/12\/27\/4-things-student-loan-borrowers-should-know-about-the-extended-payment-pause-.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Biden administration has extended the payment pause for student loan borrowers once again. Here&#x27;s what you need to know. Student loan borrowers got some [&#8230;]<\/p>\n","protected":false},"author":3,"featured_media":124391,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>4 things student loan borrowers should know about the extended payment pause - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/business\/4-things-student-loan-borrowers-should-know-about-the-extended-payment-pause\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"4 things student loan borrowers should know about the extended payment pause - Fin2me\" \/>\n<meta property=\"og:description\" content=\"The Biden administration has extended the payment pause for student loan borrowers once again. 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