Mark Your Calendars: How to Prepare for the End of the Student Loan Freeze

January 26, 2022

Updated 11/28/22: Since this blog post was published, payments and interest on federally-held student loans are now set to resume 60 days after a court decision on President Biden’s forgiveness program. If no decision has been issued by June 30th, 2023, payments will resume 60 days later.

This year, student loan borrowers had something extra to celebrate as they rang in 2022. Days before, the White House extended the loan freeze through April 30, 2022, giving millions of Americans 90 additional days without payments.

The news was both relatively unexpected—the administration had promised the previous extension would be the final one—and a welcome relief to many borrowers. The initial freezes were set to save borrowers more than $115 billion by February of 2022, so the extension has the potential to keep millions more dollars in their pockets. Additionally, a recently introduced PSLF Limited Waiver could help some workers count even more payments toward their forgiveness plan (see our Complete Guide to PSLF Updates here).

But the last-minute moves also leave the door open for more confusion and frustration when those payments do resume. With a handful of major servicers exiting the space, loan forgiveness scams on the rise, and the end-of-year timing of the extension, many HR and benefits leaders are searching for the ways to best serve their employee populations and check in on their benefit plan design.

Top of the To-Do List

One thing is clear: now is not the time to keep student loan questions or concerns on the back burner. Without preparatory measures between now and May, you and your employees may miss out on key deadlines, become overwhelmed with paperwork requests, and ultimately miss out on the chance to add benefits and solutions that help your team navigate the uncertain world of student loans and improve financial well-being.

By the time May 1 rolls around, borrowers will have had two years to get used to life without student loan payments. Some may have started new jobs during that time and aren’t accustomed to handing over a chunk of their paychecks. Others whose loans had been serviced by Navient, FedLoan, or Granite State might be eagerly awaiting information about their new servicer—but have no idea when or in what form that information will arrive.

Still, more are wondering if the PSLF Limited Waiver applies to their forgiveness plan and are now tasked with uncovering information from a program known for its strict (and often confusing) demands.

For both borrowers and employers, the extension isn’t just a nice opportunity to forget about payments for an extra 90 days. It’s an extra three months to provide solutions that will help the transition back to payments move as smoothly as possible.

Dates to Know

By taking action now, you’ll still have plenty of time to manage your workload and offer borrowers the resources they need to resume payments. Keep these key dates in mind as you gear up for the end of the student loan freeze:

Early Q1: Review your employee benefits program. Thanks to the end-of-year announcement about the extension, your packages may have already been locked in place with the assumption payments would resume in February. But solutions from Summer can be implemented off-cycle. All year long, you can add to existing packages, giving borrowers evidence-based digital tools to save an average of $2,238 per year on their loans and the peace of mind they deserve as they navigate this tumultuous space.

Early Q1: Make sure all your employee’s servicer accounts are up to date. This is always important, but absolutely crucial now that several major players have left the space. A platform like Summer can help provide your borrowers with easy-to-understand, up-to-date info about their current servicer. The service not only helps them stay on track with their payment schedule, but also lets them know who they can trust in a world where student loan scams are prevalent.

Q1 to Early Q2 (Important for Nonprofits): Submit PSLF certification forms and familiarize yourself with the program’s Limited Waiver. The recently introduced changes are designed to make it easier for borrowers to capitalize on past work, as well as receive credit for payments that would not have previously qualified. The overhaul has the potential to save borrowers a lot of money and help them earn forgiveness sooner than they previously would have, so it’s valuable to let employees know you want to help them take advantage of the changes. But the waiver is only good until October 31, 2022. Any paperwork—including loan consolidation in some cases—must be in before then. Be prepared to manage both the inbound requests of current employees who may need assistance as well as former employees who may need certification of newly qualifying past work.

See our Unpacking Nonprofit Hospital Employer Requirements for PSLF Guide

It’s been an eventful two years in the world of student loans and financial well-being. As servicers gear up to start taking again, seize the opportunity to be an organization that gives. Give your borrowers more avenues out of debt, more assistance to keep cash in their pockets, more peace of mind, and more support to be a beacon of guidance for financial freedom. Schedule a personal demo with a Summer specialist to learn more.

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