Borrower balances have effectively been frozen for more than a year, with no payments required on federal loans since March 2020, when Congress first authorized the pause as part of one of its first major Covid relief packages.
During this time, interest has stopped adding up — saving the average borrower about $2,000 over the first year — and collections on defaulted debt have been on hold.
The relief is even more significant for those who work in the public sector and may be eligible for loan forgiveness after 10 years. They are still receiving credit towards those 10 years of required payments as if they had continued to make them during the pandemic, as long as they are still working full time for qualifying employers.
Both the pause on payments and interest…