House Democrats recently passed the Build Back Better Act, President Joe Biden’s signature spending bill with investments in key progressive causes like child care, healthcare and renewable energy.
As lawmakers celebrate the passage of the trillion dollar bill, some progressives have used the victory as a platform to push Biden once again to write off federal student loan debt.
Representative Pramila Jayapal (D-Wash.) said on twitter that moving to Build Back Better “is a big step,” but it is “time to write off at least $ 50,000 in student debt per borrower and give people the relief they need.”
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Jayapal was not the only Democrat to draw attention to the student debt problem. Georgia Representative Nikema Williams added that she “will not stop fighting for #CancelStudentDebt” by a Twitter post Saturday.
Despite repeated calls for the cancellation of student loans from leading lawmakers like Senator Elizabeth Warren (D-Mass.) And Senate Majority Leader Chuck Schumer (DN.Y.), he failed It’s not clear whether Biden will write off federal student loan debt – or even if he has the power to do so.
Keep reading to learn more about student debt forgiveness, including your alternative debt repayment options like refinancing. Browse the table below to see current student loan rates from real lenders, and visit Credible to see your estimated interest rate without affecting your credit score.
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Will Biden cancel student loan debt?
As a presidential candidate, Biden campaigned to write off up to $ 10,000 in student debt per borrower. But the passage of a federal law on the cancellation of student loans proved difficult to achieve.
While many progressive lawmakers have called on Biden to write off student debt using his executive authority, other prominent Democrats have questioned the extent of his presidential powers. House Speaker Nancy Pelosi (D-Calif.), For example, has previously said that student debt cancellation “must be a law of Congress.”
But passing the debt cancellation measures by Congress would likely be a difficult task. Not all moderate Democrats agree with forgiving student loans, and similar legislation like the tuition-free community college was not included as part of the Build Back Better framework.
Yet progressive representatives Ilhan Omar (D-Minn.) And Alexandria Ocasio-Cortez (DN.Y.) continue to pressure the president to write off student debt before federal student loan repayments resume in just a few months.
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The Biden administration said borrowers should prepare for the COVID-19 administrative forbearance period on federal student loans until January 31, 2022. Education Secretary Miguel Cardona added that borrowers should expect their payments to resume in February 2022.
If you don’t feel financially ready to go back to paying off your debt, consider some of your alternative options, such as refinancing your student loan. Visit Credible to compare the rates of several lenders and see if you qualify for better terms on your college debt.
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How to prepare for the end of federal student loan forbearance
The vast majority (89%) of federal student loan borrowers don’t feel ready to resume their payments in February, according to a recent survey. If you are one of them, consider the following student loan repayment options:
- Join an Income Based Repayment Plan (IDR). Federal student loan borrowers can limit their monthly payments to 10-20% of their discretionary income through an IDR plan.
- Request a postponement of economic hardship. You may be eligible for up to 36 additional months of federal forbearance by completing an economic hardship deferral form on the Federal Student Aid (FSA) website.
- Refinance your student loans at a lower interest rate. This can help you lower your monthly payments and save money on interest before federal loan payments resume.
Well-qualified borrowers who refinanced on Credible have been able to reduce their monthly payments by over $ 250, all without increasing the total cost of interest over time. Be aware that refinancing your federal student loans to a private loan will make you ineligible for government benefits such as IDR plans and some student loan cancellation programs.
Decide if student loan refinancing is right for your situation by using a student loan refinance calculator. You can learn more about student loan refinancing by contacting an experienced loan officer at Credible.
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