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Breaking News: Student Loan Pause Extended!

breaking news: student loan pause extended
Shannon Vasconcelos

Written by Shannon Vasconceloson April 6th, 2022

I came to College Coach with close to 10 years of experience in college financial aid offices. I began my career at Boston University, where I counseled students and their parents on the financial aid process and reviewed undergraduate financial aid applications. At Tufts University, where I served as assistant director of financial aid, I developed expertise in the field of health professions financial aid. I was responsible for financial aid application review, grant awarding and loan processing, and college financing and debt management counseling for both pre- and post-doctoral dental students. I have also served as an active member of the Massachusetts Association of Student Financial Aid Administrator’s Early Awareness and Outreach Committee, coordinating early college awareness activities for middle school students; as a trainer for the Department of Education’s National Training for Counselors and Mentors, educating high school guidance counselors on the financial aid process; and as a volunteer for FAFSA Day Massachusetts, aiding students and parents with the completion of online financial aid applications.
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by Shannon Vasconcelos, former financial aid officer at Tufts University Good news for student loan borrowers! The federal student loan forbearance, implemented in March 2020 as a pandemic relief measure and scheduled to end on May 1, was extended today for the sixth time. During this forbearance, now scheduled to end on August 31:
  • Monthly loan payments are suspended on federally-held student loans;
  • Interest accrual is suspended on federally-held student loans; and
  • $0 monthly payments during the forbearance count towards the 120-payment count for qualifying borrowers working towards Public Service Loan Forgiveness.
Also announced was a “fresh start” for student loan borrowers in default. Defaulted student loans will be automatically rehabilitated so that all borrowers re-enter repayment in good standing. While you may be tempted to use this new reprieve to forget about your college loans for another four months, we would encourage borrowers to take this time to actively prepare for re-entering repayment.  Get your finances in order, reach out to your loan servicer to understand your repayment options, and start setting aside your anticipated student loan payment in a savings account. This voluntary monthly savings will help your budget adjust to eventual required monthly student loan payments, and, as the forbearance winds down, the balance saved can be used as a lump sum payment to eliminate a portion of your student loan debt before it begins accruing interest again. Learn more about preparing for repayment in our previous blog post, Make the Most of the Student Loan Pause, and be sure to both enjoy and make use of this temporary reprieve.

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