By BILL WHALEN, MELS Director and Chief Counsel

Within moments of taking office, President Joe Biden extended the student loan payment forbearance created under the CARES Act to September 30, 2021. The forbearance period started in March 2020, and was set to expire on January 31, 2021.  

  1. Borrowers with direct federal student loans in repayment continue to be excused from making their regular monthly payments;
  1. During the forbearance no interest and no penalties will accrue; and 
  1. Involuntary collection activity (wage garnishment; federal tax seizures, social security reductions) remain suspended.


  • Borrowers do have the option of making voluntary principal balance payments.
  • Borrowers in the Public Service Loan Forgiveness (PSLF) program will continue to receive credit for their monthly payments regardless of whether their payments are made. However, all other PSLF program requirements must be met in order to receive credit. (Full-time employment in a qualifying position, etc.) 
  • Borrowers in the process of rehabilitating loans in default will receive credit whether or not their rehabilitation payments are made.

For the long-term, the Biden administration has additional student loan debt policy changes under consideration. President Biden is considering a new Income Driven Repayment (IDR) Plan that sets payments at 5% of discretionary income. (The existing plans set payment at 10% to 20%.) President Biden has also suggested an additional Public Service Loan Forgiveness option that forgives $50,000.00 in debt after five (5) years and a plan to make forgiven balances non-taxable. Although these options are currently not available, borrowers are encouraged to monitor developments closely. 

For further information, members may call MELS at (212) 815-1111 or email

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