Here’s what President Joe Biden’s student loan relief 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 payment pause for another 90 days. Let’s break down what this means for you:
1. Student loan relief will continue until May 1, 2022
The good news is that student loan relief will continue for an additional 90 days beyond January 31, 2022, when it was scheduled to expire. This is the same student loan relief that more than 40 million student loan borrowers have enjoyed since March 2020. This is Biden’s third extension of student loan forbearance after President Donald Trump made two extensions of the original student loan relief in the Cares Act, the $2.2 trillion stimulus package. The surprise extension means you have three more months to determine your best game plan for student loan repayment. (Previously, Biden confirmed the end of student loan relief).
2. Private student loans still don’t have student loan relief
Importantly, this student loan relief is only for federal student loans. (Student loans might be paused, but here’s why Biden extended student loan relief). Like prior student loan forbearance, private student loans are ineligible under this student loan relief. That said, if you have private loans, your lender may offer different options for either forbearance or deferment if you are struggling to make student loan payments. (What higher interest rates mean for your student loans).
3. Progressive Democrats are a powerful voice for your student loans
Progressive Democrats in Congress such as Senate Majority Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA), Rep. Alexandria Ocasio-Cortez (D-NY) and Rep. Ayanna Pressley (D-MA), among others, have lead the fight to extend the student loan payment pause. 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 multiple civic and social organizations — to postpone the restart of student loan payments, temporary student loan forbearance would have expired on January 31, 2022. (That said, don’t expect Biden to cancel student loans before student loan relief ends).
4. Never say never with student loans
Never say never with student loans. One minute, it seems that there won’t be any more student loan relief. The next, there’s three more months of student loan relief. (Here’s who qualifies for student loan forgiveness right now). The spike in Covid cases from the Omicron variant, coupled with continued financial struggles for at least some student loan borrowers, were some factors that may have led the president to extend student loan relief. The bottom line: student loan relief is fluid. The Biden administration has continued to show a firm commitment to student loan borrowers — both in providing student loan relief and for cancelling $12.7 billion of student loans.
5. Student loan relief is temporary
While it may be difficult to remember the last time you paid federal student loans, you should remember that this student loan relief is only temporary. Yes, when student loan relief expires on May 1, student loan borrowers will have had more than two years of student loan relief. This student loan relief has included no mandatory federal student loan payments, no new student loan interest accrual, and no collection of student loans in default. However, this student loan relief won’t last forever. Start determining now how you will pay off 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: