Student Loan Borrowers Face Changes in 2022

Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

Ever since the pandemic, federal student loan borrowers have had a break. Interest rates on federal student loans have been set at 0% and repayments have been put on hold. That is expected to change in 2022 as those moratoriums are set to expire on August 31. At that point, millions of borrowers will have to resume making payments.

To prepare, borrowers are encouraged to make sure they know how much they owe. They can then devise a plan to make payments each month or seek help if they are not able to pay.

Millions of Borrowers Get a New Servicer

Resuming repayments is not the only change coming. Also, more than 10 million student loan borrowers will have a new student loan servicer (the company the federal government hires to take care of billing and payments). The Department of Education announced this fall it was changing the servicers it worked with due to stricter guidelines. Borrowers with loans at Navient, Granite State Management & Resources, and the Pennsylvania Higher Education Assistance Agency will have a new loan servicer next year.

While borrowers are supposed to be notified of the change, many may miss the letter or email. That could create problems if it results in missed payments. To prevent that from happening, federal student debt holders are encouraged to check the status of their loan and who their servicer is through the Federal Student Aid website.

More Loan Forgiveness Is Coming

The Department of Education is also making it easier to get eligible student loans forgiven in 2022 thanks to recent changes to the Public Service Loan Forgiveness (PSLF) program. Borrowers hoping to take advantage of PSLF must work for a qualified government organization (municipal, state, or federal organizations count) or a qualified 501(c)(3) organization, and they must make 120 on-time loan payments to be eligible for loan forgiveness.

Prior to the changes, the program was only available to borrowers who had Direct Loans from the government. And while borrowers were able to consolidate their debt into a Direct Loan, previous payments made on the pre-consolidation debt were not counted toward the PSLF program. Now payments count toward PSLF regardless of loan type or repayment plan.

With the change, more than 550,000 borrowers will have to make an average of 23 fewer payments to achieve loan forgiveness. It will also make 22,000 student loan borrowers eligible for immediate loan forgiveness.

Next year has a few changes in store for student loan borrowers. A little preparation will go a long way in making it a smooth transition.

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