President Joe Biden has extended 90-day student loan relief until May 1, 2022.
Here’s what you need to know – and what it means for your student loans.
Never ever say when it comes to student loans. In a highly unlikely move, Biden announced today that he will extend student loan relief for an additional three months for 41 million student loan borrowers. The temporary forbearance on student loans was scheduled to expire on Jan.31, 2022. With its third extension through executive action, which the Biden administration assured student loan borrowers would not happen, Student loan borrowers will not resume federal student loan payments until May 1, 2022. This temporary student loan forbearance also sets the interest rates on federal student debt at 0% and ends the collection of delinquent student loans . This student loan relief has been in place for continuous federal student loan borrowers since March 2020, when Congress passed the Cares Act. In response to the Covid-19 pandemic, President Donald Trump has twice extended student loan relief, as has Biden.
“[T]Today, my administration is extending the hiatus on federal student loan repayments for an additional 90 days – until May 1, 2022 – as we manage the ongoing pandemic and further strengthen our economic recovery, ”Biden said in a statement. . “In the meantime, the Department of Education will continue to work with borrowers to ensure they have the support they need to make a smooth transition to repayment and promote economic stability for their own households and for our country.”
Student loan relief: why Biden changed his mind
The Biden administration has been clear for months: This was the final extension of temporary student loan relief. They assured student loan borrowers, including through written communication, that federal student loan borrowers would resume student loan payments on February 1, 2022. Why did Biden change his mind? There could be several reasons, but here are three. First, for months progressive members of Congress, including Senate Majority Leader Chuck Schumer (D-NY) and Senator Elizabeth Warren (D-MA), relentlessly pressured Biden to extend student loan relief. Some advocates have called on Biden to extend temporary student loan relief for several months, while others have called for longer-term student loan relief until the Covid-19 pandemic is over. Second, the growing threat of the Omicron variant and the continuing threat of the Covid-19 pandemic have influenced the Biden administration to help borrowers who may be in financial difficulty. Third, Biden may have weighed the potential political fallout from the midterm elections in November 2022. In the absence of an extension of student loan relief, Biden might have feared alienating Democratic voters in the elections. ballot boxes.
Will your student loans be canceled?
Will your student loans be canceled? Student loan borrowers may be wondering if this 90-day extension of student loan relief will be a precursor to large-scale student loan cancellation. (How to qualify for the automatic student loan exemption). Biden did not refer to the student loan cancellation or the large-scale student loan cancellation in his statement today. (5 Ways Biden Could Cancel More Student Loans). That said, he encouraged student loan borrowers to consider a civil service loan forgiveness. Biden has canceled $ 12.7 billion in student loans since taking office in January. He also supports the cancellation of large-scale student loans of up to $ 10,000 for student loan borrowers, but wants Congress to act. (Here’s how to get a student loan discount during the Biden administration). Biden has said he’s prepared to write off student loans for millions of borrowers, but Congress hasn’t passed any laws. (That said, don’t expect Biden to write off student loans until student loan relief ends.)
Student loans: next steps
Student loan borrowers may breathe a temporary sigh of relief. For the next steps, borrowers will not have to make any federal student loan payments until May 1, 2022. The US Department of Education will likely contact borrowers in writing before student loan payments are restarted to ease the transition. In the meantime, you have several options:
- make no federal student loan payments and get more student loan relief;
- make one or more optional student loan payments to pay off student loans faster;
- consider an income-based repayment plan or utility loan forgiveness; Where
- Refinance student loans for a lower interest rate, a lower monthly payment, or both.
It’s important to understand all of your student loan repayment options so that you are ready when student loan payments start again. Here are some popular ways to save money and pay off student loans faster: