ExxonMobil Employees Should be Aware that the Student Loan Payment Pause was Extended Through January 2022

As ExxonMobil employees, you or many in your area may have been expecting to start paying the burden of student loan payments in the upcoming month (either for yourself or your children). On August 6, 2021, the U.S. Department of Education announced an extension of the pause on federal student loan payments to January 31, 2022. The payment moratorium, currently in effect for millions of federal student loan borrowers, was set to end on September 30, 2021.

The Department noted that this extension would be the last one. U.S. Secretary of Education Miguel Cardona stated: 'As our nation's economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment.'[1]

How many payment pauses have there been?

For many ExxonMobil employees, it is important to keep track of student payment pauses in the event your children will go into university. There have been four pauses to federal student loan repayment since the start of the coronavirus pandemic. The first pause was instituted in March 2020 for six months (through September 2020) when Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The second and third pauses came via presidential executive order and extended the payment pause through January 2021 and through September 2021, respectively. The fourth and 'final' extension is now scheduled through January 31, 2022. This means federal student loan payments will resume beginning February 1, 2022.

The Department of Education will begin notifying borrowers in your area about this final extension in the coming days, and it will release resources and information about how to plan for repayment as the end of the pause approaches.

Does interest continue to accrue during the moratorium period?

ExxonMobil employees should be aware that interest does not accrue during the moratorium period. Essentially, the interest rate is set at 0%.

Can borrowers make payments if they want to during this time?

If you are a ExxonMobil employee it is worthy to consider how Borrowers can choose to keep making their monthly student loan payments during the moratorium period if they wish. The full amount of a borrower's payment will be applied to principal. Borrowers can also choose to make partial payments during this time.

Do private student loans qualify for the payment pause?

ExxonMobil employees should also keep in mind how private student loans aren't eligible. Only student loans held by the federal government are eligible. This includes Federal Direct Loans (which includes PLUS Loans), along with Federal Perkins Loans and Federal Family Education Loan (FFEL) Program loans held by the Department of Education.

Is student loan forgiveness likely when the payment pause ends?

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Probably not. ExxonMobil employees may want to consider that while some legislators have gone on record in favor of forgiving a certain amount of federal student loan debt per borrower, the Biden administration has not taken any steps in this direction and has given no indication that it will do so. Borrowers in your area should be ready to start repaying their loans when the pause ends on January 31, 2022. In the case of continued financial hardship at that time, borrowers should contact their loan servicer to inquire about requesting an individual deferment or forbearance.

For more information, visit the Federal Student Aid website.

1) U.S. Department of Education, 2021