Make the Most of the Federal Student Loan Pause

A young woman works on her finances at her kitchen table, with her laptop, calculator, and bills spread out in front of her.

An incredible 41 million Americans have federal student loans, and here’s some welcome news from them after what has been a rough twenty months: The government has extended a pause on federal loan payments through May 1, 2022 August 31, 2022 (extended again on April 5). While some may be breathing a sigh of relief, here’s why you might not want to stop paying your student loans just yet.

What does a "pause" mean?

During this pause, interest rates for eligible student loans have been set to zero, and collection on defaulted loans has also been put on hold. This repayment extension allows the current administration to determine how the Omicron variant of COVID-19 has impacted student borrowers. The extra months will also provide additional time for borrowers to plan to resume payments and reduce the risk of defaulting or being late with payments once repayment resumes. The government estimates that those 41 million borrowers will save $5 billion per month during this extension.

What should you do now?

Although borrowers do not have to make payments through May, they are encouraged to enroll in electronic debit and income driven repayment plans to ensure a smoother transition to repayment. More information on how to enroll in this process can be found at

Even consumers who keep making payments during these months will see a financial benefit. Any payments made during the zero percent interest period will be applied directly to your principal balance, once you’ve paid all the interest that accrued prior to March 13, 2020, and any fees for defaulted loans. You don’t have to hold a business degree to recognize the value in that.

So while many people need the respite of not having hundreds of dollars in federal loans to repay for the next few months, if you don’t need the break, don’t forget that you have the option to keep making payments and help yourself long-term.


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About Author

Sandra Quadros Bowles
Sandra Quadros Bowles

Sandy Quadros Bowles is a veteran journalist who has received local, state, and national journalism awards. A resident of New Bedford, MA, she is an animal enthusiast, an avid reader, and an enthusiastic traveler.

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