Here are 4 ways President Joe Biden can extend his student loan forgiveness.
Here’s what you need to know.
President Joe Biden may be preparing to extend student loan forgiveness beyond February 1, 2022. This will be welcome news for the more than 40 million student loan borrowers who were planning to repay their federal student loan payments after the temporary student loan tenure expired Jan. Previously, the Biden administration said there would be no further extensions of student loan forgiveness and that student loan payments would be finally due as of February 1 (Biden confirms the end of student loan forgiveness). While the Biden administration hasn’t made a final decision, here are 4 ways Biden can extend student loan forgiveness.
1. Biden Extends Student Loan Forgiveness Until March 31, 2022
If Biden extends his student loan forgiveness, Biden could initiate a 60-day extension from February 1, 2022, to March 31, 2022. This short-term extension will provide several advantages. First, student loan borrowers will have more time to prepare for student loan payments to be repaid. Second, the Biden administration could monitor the Omicron variant and make further progress in managing the Covid-19 pandemic. Third, the move could also help satisfy progressives in Congress, even though many want an extension longer than 60 days to help protect financially struggling student loan borrowers.
2. Biden Extends Student Loan Forgiveness Until June 30, 2022
If Biden extends the student loan forgiveness, Biden can choose a longer-term extension until June 30, 2022. This five-month extension will be welcomed by progressives who want to give student loan borrowers more time before their federal student loan payments are repaid. A longer extension of the student loan forgiveness would give the Biden administration more time to help rebuild the economy in the wake of the Covid-19 pandemic. The US Department of Education will also have more time to ensure a smooth transition as about 16 million student loan borrowers may receive a new student loan service.
3. Biden Extends Student Loan Forgiveness Until September 30, 2022
If Biden extends student loan forgiveness, Biden could take a more aggressive approach and extend student loan forgiveness until September 30, 2022. Biden is unlikely to extend student loan forgiveness until “the end of the COVID-19 pandemic,” some have lobbied. So, this is likely to be the longest that Biden has extended his student loan forgiveness right now. However, it is a low probability. If Biden extends student loan forgiveness until September 30, it would be about a month before the midterms. Democrats in Congress may believe that a long-term extension can help Democrats retain their majority in Congress.
4. Biden Extends Student Loan Forgiveness and Cancels Student Loans
Whereas the most likely scenario is that Biden could extend the student loan forgiveness to any of these dates, or another date, and then cancel the student loans through an executive order. Previously, Biden has said he is unlikely to cancel student loans through an executive order because he does not believe he has such unilateral executive power. Biden called on Congress to cancel $10,000 in student loans for borrowers, and said he would sign any legislation on student loan cancellations approved by Congress. However, do not expect to cancel your student loan before the end of your student loan forgiveness.
Student loans: next steps
Biden likely won’t extend student loan forgiveness and delay federal student loan payments beyond February 1. Biden can repay student loan payments and offer many benefits to federal student loan borrowers such as a grace period for student loan repayment as well as direct assistance for student loan borrowers in cases of student loan default or student loan default. Whatever Biden decides, make sure you have a plan to pay off your student loan. Student loan forgiveness won’t last forever, so understand all of your options.
Here are some popular ways to save money and pay off student loans faster:
Student loans: related reading
Biden confirms end of student loan forgiveness
Biden Won’t Cancel Student Loans Before Student Loan Forgiveness Expires
How to qualify for automatic student loan forgiveness
The Department of Education will cancel $2 billion in student loans