Biden may defer student loan payments
This story is developing.
President Joe Biden can extend the student loan payment hiatus.
Here is what you need to know.
In response to the ongoing Covid-19 pandemic and pressure from Progressive Democrats, Biden could extend the student loan payment break which is due to expire on January 31, 2022. This could be a game-changer for student loan borrowers who are ‘otherwise expected to make student loan repayments again starting February 1. While the Biden administration has yet to make a final decision, Politics reports that Biden plans to postpone restarting federal student loan payments. In recent months, progressive members of Congress including Senate Majority Leader Chuck Schumer (D-NY), Senator Elizabeth Warren (D-MA) and Representative Alexandria Ocasio-Cortez (D-NY), among others , called on Biden to continue the temporary forbearance of student loans. The Biden administration could make an announcement this week regarding its final decision, according to Politics.
Student loans: student loan relief
Federal student loan borrowers have been enjoying temporary student loan relief since March 2020, when Congress passed the Cares Act. Under the at legislation, which President Donald Trump signed, borrowers enjoyed the following benefits:
- no mandatory federal student loan payments;
- 0% interest rate on federal student loans; and
- no collection of defaulted student loans
Trump and Biden have each extended this student loan relief twice, resulting in the current expiry date of January 31, 2022. Collectively, until January 31, 2022, student loan borrowers will get more than $ 110 billion. student loan cancellation as a result of this student loan relief due to the Covid-19 pandemic. This is based on $ 5 billion in interest savings each month for student loan borrowers, according to the US Department of Education.
Student loan relief: reasons for and against the extension
There are several reasons progressives want to extend student loan relief, including:
(Here’s everyone who wants Biden to extend student loan relief.)
There are several reasons why others, including the Biden administration, do not want to extend student loan relief:
Prior to today, the Biden administration had insisted that this student loan relief would end and that there would be no further extension. It also seemed clear that student loan borrowers shouldn’t expect Biden to enact a full-scale student loan cancellation until the end of student loan relief. Now, Biden can at least be open to considering a potential extension to restart student loan payments beyond February 1. While some recommended a three or six month extension, others called for extending student loan relief until the Covid-19 pandemic ends.
Student loans: next steps
There is no guarantee that Biden will extend the student loan relief. There is also no guarantee on the duration of an extension of student loan relief. Therefore, be prepared for student loan repayments to start again on February 1, 2022. Make sure that you are ready to start student loan repayments again and that you have a student loan repayment plan. Here are some popular ways to save money and pay off student loans faster: