Here are three important deadlines that every student loan borrower should be aware of.
Here’s what you need to know — and what it means for your student loans.
Student loan borrowers should be aware of this three deadlines this 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 loan
The large-scale phasing out of student loans is one of the most significant decisions of the Biden presidency. Proponents say it will boost the economy, reduce inequality and help student loan 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 issued a large-scale foreclosure on student loans. There has been speculation that Biden will cancel up to $10,000 in student loans for borrowers, but the White House has denied Biden made a decision. Progressive members of Congress are still urging the President to call off $50,000 in student loans. While Biden has not agreed to broad student loan forgiveness, Biden has canceled more than $25 billion in student loans. That includes targeted student loan cancellations, including the $6 billion in student loans canceled last month. Biden has said he will announce his decision on sweeping student loan cancellations in the coming weeks. So student loan borrowers can expect Biden’s announcement in August.
2. Student Loans: Resume student loan payments
Student loan payments for state student loans have been suspended since March 2020. That’s when Congress passed the Cares Act, the $2 trillion stimulus package. This historic relief for student loans included 0% interest on student loans and a moratorium on student loan payments. After multiple extensions from President Donald Trump and Biden, student loan payments are scheduled to resume on September 1, 2022. However, Biden has not indicated whether he will extend the student loan payment pause beyond the Aug. 31 expiration date. US Secretary of Education Miguel Cardona says Biden could extend student loan payment pause again. Republicans, however, want Biden to resume student loan payments to save money for the federal government and fight monster inflation. Biden is likely to decide the future of student loan payments in August, giving borrowers ample time to prepare.
3. Student Loan Forgiveness: Limited Waiver
The Biden administration introduced a limited waiver in October 2021 that fundamentally changes how student loan forgiveness is done. Through October 31, 2022, student loan borrowers may “count” previously ineligible student loan payments toward student loan forgiveness. This one-time exception allows student loan borrowers to receive credit for late student loan payments, partial student loan payments, and student loan payments made under the incorrect student loan payment schedule. While the limited student loan forgiveness waiver is scheduled to expire in October, Biden has already proposed a permanent extension of the limited student loan forgiveness waiver. As? Biden proposed major changes to how student loans are forgiven as part of the Department of Education’s rulemaking process. For the next 30 days, student loan borrowers and the general public can comment on Biden’s student loan forgiveness proposals. Subsequently, the Department of Education will finalize the new student loan forgiveness rules and implement the final guidelines by July 1, 2023.
The resumption of student loan payments, the prospect of a large-scale student loan foreclosure, and the extension of the limited waiver will take a significant toll on your wallet. As those deadlines approach, make sure you understand all of your student loan repayment options. Here are some of the best ways you can save money and pay off student loans faster: