The Biden administration is extending an existing pause on interest and student loan collections to include more than 1.1 million defaulting borrowers, the US Department of Education said on Tuesday.

Borrowers, whose delinquent loans are part of the federal family education loan program, were not eligible for the current payment suspension and interest waiver – implemented last year by the Trump administration and extended by President Biden until September – due to their loans held by private companies. entities.

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“Now these overdue loans will be eligible,” said higher education expert Mark Kantrowitz.

The action will protect more than 800,000 borrowers who risked having their federal tax refund seized to pay off a delinquent loan, according to the Education Department. This reduction will be retroactive to March 13, 2020, the date of the start of the national emergency linked to Covid.

The agency said it will work to automatically return any tax refunds seized or wages seized in the past year. Borrowers who have made voluntary payments during this period can apply for a refund.

In addition, all these loans in default after March 13, 2020 will be brought back into good standing. The guarantee agencies that hold these loans will assign them to the education department and ask the credit bureaus to remove the default from credit reports.