President Joe Biden may have suspended student loans, but supporters really want to.
Here’s what you need to know – And what does that mean for your student loans.
Make no mistake: Biden’s decision to extend the student loan repayment moratorium until May 1, 2022 was a surprise and game-changer for student borrowers. The Biden administration, including the US Department of Education, has made it clear for several months: The temporary student loan forbearance that began in March 2020 will not be extended beyond January 31, 2022. The end of student loan forgiveness is planned for several months, and US Secretary of State Miguel Cardona said There will be no further extension. The Department of Education even sent out written correspondence to borrowers advising on the end of student loan forgiveness and how they should prepare for student loan repayments beginning on February 1. However, that all changed last week when Biden announced that student loan borrowers would get another three months to extend. (Here’s what Biden student loan forgiveness means for your student loans.)
Advocates excited for more student relief…
This is a huge win for student loan advocates who have fought tirelessly for student loan repayment extensions. (Student loans may be paused, but that’s why Biden extended his student loan.) This is now the fifth extension of Student Loan Forgiveness from the Care Act, the $2.2 trillion stimulus package Congress passed in March 2020. President Donald Trump signed the Care Act into law, then extended the student loan forgiveness twice after the provisions expired in September 2020. As president, Biden has extended the same student loan forgiveness three times, providing a financial lifeline for student borrowers during the Covid-19 pandemic. (How to Get Student Loan Forgiveness During the Biden Administration.) Since March 2020, federal student loan borrowers have not been required to make any federal student loan payments, interest rates have been 0%, and they have not been subject to debt collection for student loans that are in default. (How to qualify for automatic student loan forgiveness). Among the advocates who have supported extending student loan forgiveness are several members of Congress such as Senator Elizabeth Warren (Democrat for MA) and Senate Majority Leader Chuck Schumer. Warren, Schumer and others have lobbied Biden over the past several months to continue the payment halt, claiming that most student loan borrowers were not financially ready to repay their student loan payments in February. (Here’s what student loan payments will look like in 2022.) Instead, they asked for more time — some members of Congress have called for an extension until later this year, while others have called for student loan forgiveness to continue until the end of the Covid-19 pandemic.
Student loan forgiveness: Now, they want to cancel student loan
While some borrowers are elated by the result, other advocates are less enthusiastic. What they really want is student loan cancellation on a large scale. (The Department of Education will cancel $2 billion of a student loan within weeks.) They see the three-month extension as beneficial, but the “real” student loan forgiveness will only come when Biden cancels student loan debt. Yes, Biden has canceled $12.7 billion in student loan debt since becoming president. (Biden will not cancel student loans before the student loan forgiveness expires.) However, some advocates believe this is not enough. They are asking Biden to cancel at least $50,000 of student loans to borrowers, Warren and Schumer have called. Others say Biden should simply cancel all $1.7 trillion in student loans, including private and federal debt. For these advocates, student loan forgiveness isn’t about pausing payments or saving on interest costs. Instead, it’s about completely eliminating student loan debt. Despite their wishes, Biden does not intend to cancel all student loan debt and does not support canceling up to $50,000 of student loan debt. Biden has repeatedly called for $10,000 in student loans and wants Congress to pass legislation that would sign him. Rather than acting, progressives in Congress appear to be focusing more on pressing Biden to cancel student loans than finding a bipartisan solution to tackle the rising cost of higher education. So, even with an extra 90 days of student loan forgiveness, some borrowers will be happy to have extra time to prepare for student loan repayment, while others are not until all student loan debt is cleared.
Student loan forgiveness will not last forever. Make sure you are ready to repay your student loan. Here are some popular ways to pay off student loans faster:
Student loans: related reading
Student Loans May Be Paused, But This Is Why Biden Extends Student Loan Forgiveness
How to qualify for automatic student loan forgiveness
Biden Won’t Cancel Student Loans Before Student Loan Forgiveness Expires
The Department of Education will cancel $2 billion in student loans