Here’s what President Joe Biden’s student loan forgiveness means for your student loans.
Here’s what you need to know.
On Wednesday, Biden surprised everyone when he decided to extend the student loan repayment hold for another 90 days. Let’s break down what this means for you:
1. Student loan forgiveness will continue until May 1, 2022
The good news is that student loan forgiveness will continue for an additional 90 days after January 31, 2022, when it was due to expire. This is the same student loan forgiveness that more than 40 million student loan borrowers have enjoyed since March 2020. This is Biden’s third extension of student loan tolerance after President Donald Trump extended the original student loan forgiveness in the Care Act, which is $2.2. trillion stimulus packages. A sudden rollover means you have three more months to decide the best student loan repayment game plan. (Previously, Biden has confirmed the end of student loan forgiveness.)
2. Private student loans still do not contain student loan forgiveness
Most importantly, this student loan forgiveness is only for federal student loans. (Student loans may be paused, but that’s why Biden extended student loan forgiveness.) Like the forbearance on a previous student loan, private student loans do not qualify under this student loan forgiveness. However, if you have private loans, the lender may offer different options for holding or deferring if you are struggling to make student loan payments. (What higher interest rates mean for your student loans.)
3. Progressive Democrats are a strong voice in your student loans
Progressive Democrats in Congress such as Senate Majority Leader Chuck Schumer (D-New York), Senator Elizabeth Warren (D-Mass.), Rep. Alexandria Ocasio-Cortez (D-New York) and Rep. Ayanna Pressley (D-Mass.), among others. Struggle to extend the suspension of student loan repayment. After months of lobbying the president, Biden granted the long-awaited extension. (Here’s how to get student loan forgiveness during the Biden administration.) Without their repeated calls—and the support of several civic and social organizations—to defer student loan payments, the temporary student loan forbearance would have expired on January 31, 2022. (However, don’t expect Biden to cancel student loans before the student loan forgiveness expires.)
4. Never Say Never With Student Loans
Never say never with student loans. One minute, it looks like there will be no more student loan forgiveness. The next day, there are three more months of student loan forgiveness. (Here’s who qualifies for student loan forgiveness now.) The sudden rise in Covid cases from the Omicron variant, along with the ongoing financial struggles of at least some student borrowers, were factors that may have prompted the president to extend student loan forgiveness. Bottom line: Student loan forgiveness is fluid. The Biden administration has continued to demonstrate its unwavering commitment to student borrowers — both in offering student loan forgiveness and in canceling $12.7 billion in student loans.
5. Student loan forgiveness is temporary
While it can be difficult to remember the last time you paid your federal student loans, you should remember that this student loan forgiveness is only temporary. Yes, when student loan forgiveness expires on May 1, student loan borrowers will have had more than two years of student loan forgiveness. This student loan forgiveness did not include any mandatory federal student loan payments, new student loan interest was not collected, and student loans were not collected in the event of a default. However, this student loan forgiveness will not last forever. Now start deciding how to pay off your student loans. Don’t wait until the last minute. Learn your best options now. 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