From student loan cancellation to student loan cancellation, more student loan relief could look like this
More student loan relief might look like this.
Here’s what you need to know – and what it means for your student loans.
President Joe Biden shocked everyone when he extended student loan relief for an additional 90 days after the Biden administration said there would be no further extension of the student loan loan forbearance . Now, with the Covid-19 pandemic continuing and pressure from Democrats in Congress to cancel student loans, there may be more student loan relief. If Biden enacts more student loan relief, it might look like these options:
Biden could extend temporary student loan forbearance by several months
If Biden decides to order more student loan relief, the more likely scenario is that Biden will extend the student loan payment break for the fourth time. (Here’s why Biden extended student loan relief.) If that happens, and there is no guarantee it will, it would mark the sixth extension of the Cares Act’s temporary student loan forbearance, which is the $ 2.2 trillion stimulus package that Congress has put in place. adopted and which President Donald Trump enacted in March 2020 Biden could extend student loan relief by several months. For example, his last extension was from February 1 to May 1, so he could consider another 90-day extension. Alternatively, it could extend for a shorter period (like 30 days) or a longer period (like 120 days). Biden will likely assess several factors, including the progression of the Covid-19 pandemic and the state of the U.S. economy, among other considerations. (What Biden’s Latest Student Loan Relief Means for Your Student Loans).
Biden May Extend Student Loan Relief Until Covid-19 Pandemic Ends
Some progressive members of Congress want Biden to extend student loan relief until the end of the Covid-19 pandemic. While these lawmakers are happy with the latest 90-day extension, some say it is insufficient to protect student loan borrowers struggling in the wake of the Covid-19 health emergency. Their solution is to extend the temporary hold on student loans indefinitely, which would allow the most vulnerable student loan borrowers to financially recover and generate additional cash flow to pay living expenses, repay debts and begin to recover. build a financial future. The move also comes at a time when student loan interest rates are likely to rise over the coming year. Despite these demands from progressives, Biden is unlikely to extend student loan relief until the end of the Covid-19 pandemic.
Biden could cancel up to $ 10,000 in student loans through executive order
While Biden has suspended student loan payments, advocates really want student loan cancellation. In the coming weeks, expect more rhetoric about the large-scale cancellation of student loans from Congressional Democrats as well as civic and social organizations. Supporters say large-scale student loan cancellation will boost the economy, reduce disparities, help struggling borrowers, and allow young Americans to marry, raise families, buy homes and save for their retirement. Biden has been consistent in his position on large-scale student loan cancellation. He supports up to $ 10,000 for student loan cancellations, but he doesn’t think he has the executive power to write off student loan debt through an executive order. To date, Biden has not enacted any large-scale student loan cancellations and it does not appear that he intends to do so in the short term. (Here’s how to qualify for your automatic student loan waiver).
Biden could cancel up to $ 50,000 in student loans through executive order
Would Biden cancel up to $ 50,000 in student loans? It’s no secret that Senate Majority Leader Chuck Schumer (D-NY), Senator Elizabeth Warren (D-MA), Representative Alexandria Ocasio-Cortez (NY), Representative Ayanna Pressley (D -MA), Representative Ilhan Omar (D-MN) and others have expressed support for a widespread cancellation of student loans of up to $ 50,000 for student loan borrowers. (Here’s how to get a student loan discount during the Biden administration). However, should Biden ever attempt to cancel student loans for all borrowers through an executive order, he’s unlikely to consider a student loan forgiveness of up to $ 50,000. Biden has never backed that amount of student loan cancellation, and Biden doesn’t seem willing to change his stance either. (Biden will not cancel student loans until student loan relief ends).
Biden could encourage Congress to pass law to write off student loan debt
As president and presidential candidate, Biden has consistently called on Congress to write off up to $ 10,000 in student loans for student loan borrowers. Biden never said he would directly write off $ 10,000 in student loans. On the contrary, as a former US senator, Biden knows Congress has the power to pass a student loan cancellation law. As such, Biden urged Congress to give more relief to student borrowers. Biden has said he’s ready to cancel student loans for millions of student loan borrowers, but Congress has passed no student loan forgiveness. If Congress passes this student loan legislation, Biden has said he would happily sign any bills.
Biden could order more targeted student loan cancellation
If Biden enacts more student loan relief, he may continue to focus on targeted student loan cancellation. For example, the Department of Education will write off $ 2 billion in student loans in a matter of weeks. It is likely that Biden will pursue targeted student loan cancellation to build on his strategy to date. Biden has canceled $ 12.7 billion in student loans since becoming president. This includes the student loan exemption for government officials, totally and permanently disabled student borrowers, and borrowers who have been misled by their college or university. Biden’s student loan cancellation strategy has targeted specific student loan borrowers rather than all student loan borrowers. Biden could continue to cancel more student loans to these affected borrower groups, or he could target new constituencies.
Student loans: next steps
What are the next steps for your student loans? Most importantly, get ready to pay off student loans now. There can be no assurance that Biden will further extend student loan relief. The most likely scenario is that this is the final extension of student loan relief and Biden will no longer extend the temporary student loan forbearance. Therefore, expect to restart student loan payments from May 1. While Biden may extend the student loan payment hiatus, prepare as if he won’t. Make sure you understand all of your options and get started now. Here are some popular ways to pay off student loans faster: