Student loan relief extended until Jan. 31

President Joe Biden’s administration has extended the pause on federal student loan payments until the end of January.
Published: Aug. 30, 2021 at 4:19 PM EDT|Updated: Aug. 30, 2021 at 6:59 PM EDT
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LOUISVILLE, Ky. (WAVE) - President Joe Biden’s administration has extended the pause on federal student loan payments until the end of January.

Debt relief provided to federal student loan borrowers has been extended into next year, but the Department of Education warns not to expect another delay. Officials said a definitive end date of Jan. 31 will reduce the risk of delinquency and defaults once payments start again.

The pause on payments originally was scheduled to expire at the end of September. The Biden administration decided to extend the pause because of the surge in COVID cases due to the Delta variant the last couple of months.

In Kentucky and Indiana, the average balance for federal and private student loan borrowers is more than $30,000, which is about 16 percent less than the U.S. average of more than $36,000. With that balance, borrowers typically pay about $228 a month on loans.

“Jan. 31 is right around the corner,” student debt lawyer Leslie Tayne said. “It’s a good time to be prepared for that happening. Check in with your service, look at your budget, pay out other debts, and (see if) you can pay down federal student loans. There is no interest on them. Anything you pay for it at this time goes to principle that reduces the overall debt.”

Tayne said it’s important not to wait, to start paying debt now if you can. She added that the extension gave people more time to prepare a budget, and pay off high-interest debt like credit cards, personal loans or if you are behind on rent or mortgage.

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