Here are 3 important deadlines every student borrower should know.
Here’s what you need to know — and what that means for your student loans.
Student borrowers should be aware of three deadlines that will affect the future of student loans. In the coming weeks, President Joe Biden could make these monumental decisions regarding student loans and student loan forgiveness.
1. Large-scale cancellation of student loans
The large-scale cancellation of student loans is one of the most important decisions of the Biden presidency. Proponents say it will boost the economy, reduce disparities and help student borrowers have more money to get married, start a family, buy a home, save for retirement and start a business. Yet despite these potential benefits, Biden has not enacted large-scale student loan forgiveness. There has been speculation that Biden will forgive up to $10,000 in student loans for borrowers, but the White House has denied Biden has made a decision. Progressive members of Congress are still pushing the president to forgive $50,000 in student loans. Although Biden did not accept a large student loan forgiveness, Biden has forgiven more than $25 billion in student loans. This includes targeted cancellation of student loans, including $6 billion in student loans canceled last month. Biden said he plans to announce his decision on large-scale student loan forgiveness in the coming weeks. So, student borrowers can expect Biden’s announcement in August.
2. Student loans: restarting student loan repayment
Student loan payments for federal student loans have been suspended since March 2020. That’s when Congress passed the Cares Act, the $2 trillion stimulus package. This historic student loan relief included 0% interest on student loans and a moratorium on student loan repayments. After several extensions from President Donald Trump and Biden, student loan payments are expected to resume on September 1, 2022. However, Biden has not indicated whether he will extend the student loan payment pause beyond the start date. expires August 31. US Education Secretary Miguel Cardona has said Biden could extend the student loan payment break again. That said, Republicans want Biden to boost student loan repayments to save money for the federal government and fight monster inflation. Biden will likely decide the future of student loan repayments in August so borrowers have plenty of time to prepare.
3. Student Loan Forgiveness: Limited Exemption
The Biden administration instituted a limited, game-changing waiver in October 2021 for student loan forgiveness. Until October 31, 2022, student borrowers can “count” previously ineligible student loan payments for student loan forgiveness. This unique exception allows student borrowers to get credit for late student loan payments, partial student loan payments, and student loan payments made under the wrong student loan payment plan. While the limited waiver for student loan forgiveness is set to expire in October, Biden has already proposed a permanent extension of the limited waiver for student loan forgiveness. How? Biden has proposed major changes to student loan forgiveness through the Department of Education’s rulemaking process. Over the next 30 days, student borrowers and the general public will be able to comment on Biden’s proposals for student loan forgiveness. Then, the Department of Education will finalize the new student loan forgiveness rules and implement the final policies by July 1, 2023.
The restart of student loan repayments, the prospect of large-scale student loan forgiveness, and the extension of the limited waiver will have a significant impact on your wallet. As these deadlines approach, make sure you understand all of your student loan repayment options. Here are some of the best ways to save money and pay off your student loans faster: