When Is the Student Loan Forbearance Ending? Sometime in 2023

Updated on November 28, 2022

The student loan forbearance will end 60 days after any legal challenges to President Joe Biden’s student debt relief plan are resolved or 60 days after June 30 — whichever comes first.

It’s been nearly three years since federal student loan borrowers have had to make their monthly payments, and interest has been added to their loan balance. Following a recent announcement from the Biden administration, people might have even more time.

The student loan forbearance might not end until August 2023.

White House officials hoped that they could smooth the restart of student loan payments by first eliminating a large portion of the debt. Yet not long after the president announced his plan to cancel up to $20 thousand in federal loans for millions of Americans, several conservative groups and Republican-led states attacked the cancellation plan in court. Two of these lawsuits have successfully halted the relief temporarily, forcing the U.S. Department of Education to close the application portal after 26 million people had applied.

Given the current uncertainty, the Biden administration has decided to pause federal student loan payments once more.

“It would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests,” Education Secretary Miguel Cardona said in a statement.”

In the past, the federal government has provided one date when student loan payments would resume. This time, it left things more open-ended, saying that the payment pause will end 60 days after the court cases have been resolved or, if the courts haven’t resolved the issue by June 30, 60 days after that.

Regardless of when the forbearance ends, you’ll get a billing statement from your servicer at least 21 days before your first payment is due.

What if I’m waiting on loan forgiveness?

Even though the president’s student loan forgiveness plan is on hold, the Education Department is still processing applications from people who applied for the Public Service Loan Forgiveness Waiver. It’s also working with its student loan servicers to finish the Income-Driven Repayment Plan Waiver & Account Adjustment, which it estimates would eliminate millions of dollars in federal loans for tens of thousands of borrowers.

If the latest forbearance period ends in June, the department should have already applied the relief to borrowers’ accounts.

If it ends sooner, borrowers will have to start paying again without knowing how soon their loans will be forgiven. You may be able to request forbearance if you’d rather not pay until you get more clarity. Note: If you go that route, you’ll stop earning credit towards IDR Plan forgiveness, and if you work in public service, PSLF.

What if I can’t afford my student loan payments?

The student loan debt forbearance during the Coronavirus pandemic has been instrumental in preventing delinquencies and defaults. Once the freeze ends, that protection goes away, and borrowers will enter repayment during a time with record inflation and an economy that’s been in a recession for several months.

The New York Federal Reserve reported earlier this year that two groups of borrowers would likely struggle more than others when the student loan payment pause ends:

People not enrolled in an income-driven repayment plan
Non-white, female, and middle-aged borrowers with lower-income and less education.

If you know you’ll struggle to add another bill to your budget, contact your student loan servicer about switching to an income-driven repayment plan. Each IDR plan caps your monthly payments at a portion of your income and forgives your remaining loan balance after your last payment.

Borrowers with loans made through the Direct Loan Program, including Parent PLUS Loans, have access to better repayment and debt relief options. If you went to school before 2016, there’s a chance you may have older loans made through the Federal Family Education Loan Program and the Perkins Loan Program. Those loans must be consolidated into a Direct Loan before receiving those added benefits. Read more about FFEL loan forgiveness.

Are you struggling with private student loans? There aren’t many options to permanently lower your monthly payments. Your servicer may be willing to grant a temporary forbearance or deferment, but when that time runs out, your payments will increase, and you’ll be stuck with a bill you can’t afford. Student loan refinancing can help, depending on your credit score and income. But interest rates have increased over the past several months, which can make your refinance options less attractive.

Learn More: How to Refinance Student Loans

Bottom Line

The Cares Act forbearance that started with President Trump and has been extended several times by Congress and President Biden will end sometime in 2023. You may know before payments start back where you stand regarding loan forgiveness for working in public service or paying for 20+ years. And if the courts allow Biden’s cancellation plan to move forward, you might have that relief applied to your balance.

Before the forbearance ends, you’ll have time to devise a plan for your student loan debt. Visit the Federal Student Aid website, StudentAid.gov, to view your loans, update your contact information, and review your repayment options.

If you need help figuring out what to do, I can help. I’ll review your situation and find the repayment and forgiveness strategy that fits your goals. Schedule a call with me today.