The student loan repayment moratorium, which has allowed all borrowers with federal student loans to take a break from making payments without penalty, saw its fourth and final extension last month and is set to end early next year. Giving borrowers a break during a time of national economic crisis might seem reasonable, but the break has gone on for far too long. And thanks to the intricacies of the loan repayment system, some high-earning borrowers are reaping a windfall.
Borrowers who are repaying their student debt on an income-driven repayment (IDR) plan are generally expected to make 20 years of payments (240 monthly payments) on their loan before the balance is forgiven. Borrowers who are enrolled in Public Service Loan Forgiveness only need to make payments for ten years. The loan moratorium was set up to allow the months of non-payment during the repayment freeze to count toward those required payments, meaning some borrowers will have 22 months of zero-dollar payments counted toward the total number required for them to achieve forgiveness.
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