Student Loan Forgiveness: Biden Has 3 Key Decisions – Forbes | Vette Leader

President Joe Biden has 3 key decisions to make regarding your student loans.

Here’s what you need to know – and what it means to you.

student loans

In the coming weeks, you can expect Biden to make three key decisions that will directly impact your student loans:

  • cancellation of student loan;
  • student loan payment pause; and
  • Limited Student Loan Forgiveness Waiver

let’s explore

1. Termination of Student Loan

First, Biden is deciding whether to issue a large-scale student loan foreclosure for millions of student borrowers. Proponents say large-scale student loan cancellations are an overdue policy to give millions a fresh start in their financial lives. Opponents say it is a redistribution of wealth to wealthy student-loan borrowers at the expense of working uncollege-educated Americans. However, there are several sub-rules regarding the general forgiveness of student loans. First, Biden must decide whether to call in student loans. Biden has forfeited more than $30 billion in student loans since taking office. Last week, for example, Biden canceled $6 billion in student loans for 200,000 student loan borrowers. Now he must determine whether sweeping student-loan forgiveness is the best policy in the face of the economy, inflation, and equality, among others. Second, if Biden decides to cancel student loans, he must decide how much student loan debt he will cancel. The White House has denied that Biden decided to call down $10,000 in student loans, despite progressive members of Congress trying to persuade the president to call down $50,000 in student loans. Biden could call any amount of student loans, although $10,000 is the most likely scenario. The Biden administration has said it expects an announcement on large-scale student loan forgiveness before August 31, 2022.

2. Student loan payment pause

Second, the student loan pause ends on August 31, 2022. Congress passed historic student loan relief in March 2020 as part of the Cares Act, the $2 trillion stimulus package. Since then, federal student loan payments have been suspended, federal student loan interest rates have been set to 0%, and collection of student loan debt in default has stopped. President Donald Trump and Biden used executive power to extend that student loan easement six times in total. Since Biden became president in January 2021, student loan borrowers have not had to pay a single dollar in state student loans. If the student loan payment pause ends next month as planned, student loan payments will resume starting September 1, 2022. While Biden has not commented publicly, there is some speculation that Biden could extend student loan easing beyond the November midterm elections. For example, US Secretary of Education Miguel Cardona said last month it’s possible Biden could extend the pause on student loan payments.

3. Limited Student Loan Forgiveness Waiver

Third, Biden must decide how to deal with the limited waiver on student loan forgiveness. This breakthrough in student loan forgiveness will expire on October 31, 2022. Last October, the Biden administration made major changes to how student loans are foregone, including relaxing the rules for forgiving public sector loans. With these changes, student loan borrowers can more easily qualify for student loan forgiveness through a one-time limited waiver. For example, student loan borrowers may receive student loan forgiveness credit for previously ineligible student loan payments. This includes student loan payments made under the wrong student loan repayment schedule, as well as late or partial student loan payments. The limited waiver is especially helpful for student loan borrowers who are seeking government loan waivers and need 120 monthly payments to cancel their student loans. Biden could extend the limited student loan forgiveness waiver to allow more student loan borrowers to take advantage of the limited student loan forgiveness waiver. Ultimately, Biden must decide whether to extend the limited waiver or let it expire on October 31 as planned.

Student loans: next steps

Expect Biden to make these three key decisions soon. Biden could decide to implement any, all, or none of these initiatives. The President is likely to address the large-scale student loan cancellation and student loan payment pause next month or sooner. Biden has until October to decide on the limited waiver, although he could announce each decision when deciding how to proceed with student loan forgiveness and the student loan payment pause. In the meantime, create a student loan repayment game plan. They don’t know what policies, if any, Biden will implement. Consider these popular options to pay off student loan debt and save money:

Student Loans: Related Reading

9 million borrowers now qualify for student loan forgiveness

Senators propose major changes to student loan forgiveness

Biden cancels $6 billion in student loans for 200,000 borrowers

The Department of Education announces a major overhaul of student loan administration

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