Federal Student Aid director Richard Cordray said during remarks this week that while the nearly 2-year pause has been "welcome relief, no doubt," January 31, 2022 is the last day borrowers will be experiencing that relief.
"We recognize that the stakes are extremely high as we face this challenge," Cordray added.
Transitioning 43 million borrowers back into repayment — along with the 16 million borrowers who will make payments to new lenders — is an unprecedented task with many potential hurdles. An Education Department spokesperson said the department "will continue to work to ensure that all of our borrowers can experience a successful return to repayment."
Student loan payments have been on pause — and not collected interest — since March 2020.
During the pandemic, about 580,000 borrowers had their student loans forgiven, thanks to a target loan forgiveness program put in place by the Biden administration. Critics, however, said the forgiveness program did not go far enough and that the administration should have provided debt relief to more borrowers.
A recent survey by the Student Debt Crisis Center found that 89% of borrowers with full-time jobs don't feel financially-secure enough to resume payments next year, given the large chunk of their incomes that will go toward their student debt.
"When we think about that huge, huge chunk of their income going to student loans at a time when the nation's talking about rising inflation and increased costs, it's a recipe for financial disaster," Student Debt Crisis Center Executive Director Cody Hounanian said.