If you have student loans, you may be experiencing the red, white and blues.
Here’s what you need to know.
If you have student loans, you may be wondering what the future holds for your student loan debt. If the answer is uncertainty, welcome to the club. Student loan forgiveness and the student loan payment pause, in particular, may be top of mind. President Joe Biden is weeks away from potentially announcing billions of dollars of student loan forgiveness for millions of student loan borrowers. However, student loan borrowers don’t know if they qualify or how much student loan debt they could get.
Student loan forgiveness: when will Biden cancel student loans?
First, you may be wondering when Biden will cancel student loans. Biden likely will announce his decision whether to cancel student loans before August 31, 2022. As a presidential candidate, Biden called on Congress to cancel up to $10,000 of student loans for student loan borrowers. However, as president, Biden has focused on targeted student loan cancellation rather than wide-scale student loan relief. For example, Biden has canceled more than $30 billion of student loans. This includes $6 billion of student loans that Biden canceled for 200,000 borrowers. Biden has also canceled $8.1 billion of student loans for public servants. If Biden cancels student loans, he will most likely cancel $10,000 of student loan debt. That said, progressive members of Congress have renewed a push for Biden to cancel up to $50,000 of student loans. Biden also could impose an income limit, which could mean fewer student loan borrowers will qualify for student loan relief.
Student loan payment pause: to extend or not to extend
Second, student loan borrowers want to know whether student loan payments will restart on September 1, 2022. Currently, the student loan payment pause will end on August 31. Wiht only a month away, student loan borrowers haven’t received official guidance on whether student loan payments will restart. Student loan borrowers haven’t been required to make a single student loan payment since March 2020. Why? Congress passed historic student loan relief as part of the Cares Act, the $2 trillion stimulus package that President Donald Trump signed into law. Trump and Biden extended the student loan payment pause six times. However, the Biden administration has remained relatively silent on any potential extension of the student loan moratorium. U.S. Secretary of Education Miguel Cardona has indicated Biden could extend student loan relief. However, Biden hasn’t commented publicly. For now, student loan borrowers should prepare for the restart of student loan payments. There’s no guarantee the student loan payment pause will be extended. Here are some good ways to start paying off student loans:
- Student loan refinancing (lower interest rate + lower payment)
- Income-driven repayment (lower payment)
- Student loan forgiveness (federal student loans)