Student Loan Payment Pause Extension

February 8, 2022: 

For those with outstanding student loan obligations, the weight of debt is heavy, even if placed on a backburner slightly due to the option of payment pauses made available by the government. Inflation, Omicron, and a changing job market have combined to form a challenging economic landscape for many borrowers. With payments now paused until May 1st, we are getting a lot of financial planning questions on the topic. Here are some answers to address those most frequently asked:


Payment Pause Officially Extended Through May 1st, 2022.  Federal student loans borrowers have been able to pause their monthly payments since March 2020 without having interest accruing on their debt balances. The most recent interest-free forbearance was up for expiration at the end of January. This new extension will help ease the Omicron variant-induced financial burden for borrowers through May 1st, 2022.

How Do I Pause My Payments? Pausing your payments requires no action on your behalf. It is automatic, interest will not accrue, and debt collection efforts are inactive during the moratorium. It is important to note that since payments are automatically paused, if you do want to continue payments, these will have to be done manually regardless of any previously automated schedules you have had.

Should I Pay Down My Loan During the Moratorium? There is always a benefit to paying off loans that accrue interest over time. The question is: do you have other significant debts that are currently accruing interest? If so, it may be best to use this opportunity to pay down these higher interest rate debts first. For example, if you are in debt with credit cards, personal loans, or lines of credit, it is likely advantageous to use this extended pause period to pay down the higher interest rate debt.

If you don’t have any other debt accruing interest–then by all means, take this opportunity to reduce the principal amount of your student loan debt. This way, once the payment pause concludes, your principal amount of student loan debt will be lower, and the total interest accrued over the life of the loan will be less.

What if My Federal Student Loan is in Default? If your federal student loan is in default, there will be no wage garnishments during the forbearance period. Collection efforts are inactive. 

Does the Payment Pause Extension Apply to all Student Loans? What About FFEL Loans? Federal Family Education Loans (FFEL) are only under forbearance if the federal government owns your loan. Most FFEL loans are privately-owned, so this forbearance does not apply in most cases. You can check the ownership of your FFEL loan by logging into

Privately-owned Student Loans do NOT Benefit from this Interest-free Forbearance extension. These loans include Perkins loans as well as the majority of FFEL loans. However, many private servicers have their own programs. Contact your loan servicer and see what assistance is available.

Be Aware of Potential Scams. Scammers tend to target borrowers during loan forbearance periods. Stay alert for phone, text, and email scams.

We welcome Centerpoint clients to reach out to further discuss student loan repayment strategies and we hope you find these insights helpful and concise.