Another Huge Sign That Biden May Extend The Student Loan Payment Pause - Forbes

guduka.blogspot.com

There’s another huge sign that President Joe Biden may extend the student loan payment pause.

Here’s what you need to know.

Student Loans

Just when you thought that this would be the final extension of student loan relief, there’s now another sign that student loan payments may not restart after May 1, 2022. Yes, Biden may extend the student loan payment pause again. While Biden hasn’t made an official announcement, Politico reports that behind-the-scenes action at the U.S. Department of Education sheds light on what the Biden administration may do next.

Student loan payment pause may be extended: here’s why

The U.S. Department of Education reportedly has instructed federal student loan servicers — the companies that manage student loan payments — to stop sending notices to student loan borrowers about the restart of student loan payments. (6 major changes to student loan forgiveness). Previously, the Education Department had been notifying student loan borrowers about the restart of federal student loan payments after May 1, 2022. If this process has now stopped, that’s a huge indication that Biden could extend the student loan payment pause for an unprecedented fourth time. Federal student loan payments have been paused since March 2020. This means that student loan borrowers haven’t made a single federal student loan payment since Biden has been president. In aggregate, student loan borrowers have saved $5 billion a month during the Covid-19 pandemic. This has resulted in more than $120 billion of savings on their student loans.

Biden will cancel $6.2 billion of student loans

Biden has cancelled more than $15 billion of student loans since becoming president. The U.S. Department of Education announced yesterday that 100,000 more student loan borrowers are now eligible for student loan cancellation due to the changes the Biden administration made to the Public Service Loan Forgiveness program in October. These student loan borrowers will get $6.2 billion in student loan cancellation. This is another big win for student loan borrowers when it comes to student loan forgiveness. The Education Department expect another 450,000 student loan borrowers to get student loan forgiveness as a result of changes to student loan forgiveness that relax the rules. Specifically, borrowers can complete a limited waiver for student loan forgiveness with the U.S. Department of Education. This limited waiver will enable them to count prior student loan payments that were deemed ineligible toward student loan forgiveness. For example, this includes late student loan payments, partial student loan payments, and student loan payments made under the wrong student loan repayment plan.

White House Chief of Staff Ron Klain said on a podcast last week that Biden may consider other options for student loan relief. This could include wide-scale student loan cancellation, which Biden previously has said he didn’t believe he has executive authority to enact. Biden has focused on targeted student loan cancellation, but he has called on Congress to pass legislation on $10,000 of student loan cancellation for borrowers. Progressive Democrats have argued that student loan borrowers aren’t prepared to restart student loan payments given the state of the economy and the Covid-19 pandemic. (4 reasons Congress hasn’t cancelled your student loans). They believe wide-scale student loan cancellation will stimulate the economy, reduce disparities and help borrowers gain more financial freedom. Republicans in Congress have criticized further extensions of student loan relief, saying it is unfair wealth redistribution that hurts Americans who didn’t go to college or who don’t have student loans.

For now, student loan payments will restart after May 1, 2022. Most importantly, prepare as if there will be no extension of the payment pause. Learn all the best strategies for student loan repayment.

Here are some smart ways to save money and pay off student loans: