As the pandemic continues to horribly impact the national economy, new global concerns have added to the financial stress experienced by everyone, especially student loan borrowers. Internationally, the coronavirus in some areas of the world continues to cause severe global supply-chain disruptions. Conflict in Europe has also driven up gas and food prices. With their only options a choice between paying for gas, food and shelter or paying their student loans, many borrowers have had no choice but to go into default status even though doing so severely damages their credit scores.

There is good news. Read on to learn about recent positive student loan payment changes:

Important Current Details

Earlier this month on Wednesday, April 6, 2022, President Joe Biden extended the pause on student loan repayments once again. This pause ends on August 31, 2022. He also increased borrower protections by resetting all defaulted student loans to give borrowers the time that they need to apply for forgiveness and income-based repayment plans.

Although the default reset applies to borrowers who took out Federal Family Education Loan (FFEL) loans, the pause on student loan payments still applies only to loans currently managed by the government. Many FFEL borrowers continue to feel that they were misled by the original FFEL program since FFEL representatives and advertising promoting the now-defunct program focused on making the loans seem like true federal student loans. Instead, borrowers primarily received private commercial loans merely backed by the federal government when Sallie Mae was a federal entity.

Future of Student Loan Debt

President Biden is currently weighing his options. White House officials have announced he may extend the student loan pause once more by the restart date of September 1, 2022. It's also highly likely that he will have a plan to tackle student loan debt that includes discharging up to $10,000 of debt for all federal student loan borrowers. Whether he might extend that type of benefit or any other benefits to FFEL borrowers remains unknown. Officials have indicated that they feel he will have a plan for discharge by the end of the current pause even though he personally believes that any type of discharge order should come from Congress.

FFEL borrowers who feel that private lenders defrauded teenagers lacking the financial knowledge to understand the difference between federal private loans and federal loans, when entities representing private lenders and the government at the time didn't make clear enough distinctions, currently have little recourse legally to address the matter. For example, although the loans are private, borrowers can't include them in a bankruptcy.

On April 24, 2009, President Barack Obama recognized that the FFEL program wasted money and placed a burden on taxpayers by essentially paying commercial lenders to hand out loans. With the passing of the Health Care and Education Reconciliation Act of 2010 and the supplemental Student Aid and Fiscal Responsibility Act, he ended the program and replaced it with the Federal Direct Student Loan Program that offers true federal student loans managed by the Department of Education (DOE).

Yet, he and politicians at the time never fully acknowledged that the FFEL program harmed more than taxpayers in general and the federal government. It acted as a fraudulent scheme that promised true federal protections to borrowers. The pandemic pause exception to FFEL borrowers has shown that the federal government doesn't protect them at all even though each loan had "federal" stamped on it at the time a borrower took one out through the FFEL program.

Ways to Get Help Now

FFEL and other private student loan borrowers have options, especially now that President Biden has extended default protection and reset to private student loans. Any true federal or FFEL student loan borrower can contact the DOE during normal business hours using one of the methods outlined on the Contact Us page at StudentAid.gov for help with forgiveness, if applicable, or the setup of an affordable repayment option. Other private loan borrowers must reach out to their current loan servicers using the contact details on their billing statements.

Things to Keep in Mind

Of course, none of the current options promise lasting student loan payment relief. Some borrowers feel like they're wading through a broken system designed to increase instead of decrease their student loan and overall debt. Although the recent news doesn't completely overhaul and fix the system, it does show that President Biden and others haven't given up on finding a solution. Experts believe that this recent pause at least gives every borrower a better chance at temporarily solving their late or default student loan repayment problems.