Department of Education confirms Biden will soon decide on student loan payments pause – Forbes | Vette Leader

The US Department of Education has now confirmed that President Joe Biden will “soon” decide whether to extend the student loan payment pause.

Here’s what you need to know – and what it means for your student loans.

student loans

It’s crunch time in America for student loans. Biden faces three deadlines that will affect the future of student loan repayments and student loan forgiveness. First, the student loan payment pause ends on August 31, 2022. Without an unprecedented seventh extension of student loan forbearance, federal student loan payments will resume on September 1. Second, within days, Biden could announce his decision on sweeping student loan forgiveness for more than 40 million student loan borrowers.

Student Loan Payment Break: Announcement coming every day

Within days, Biden could announce an extension of the student loan payment pause, meaning student loan borrowers would not have to make mandatory federal student loan payments. Federal student loan payments have been suspended since March 2020, when Congress passed historic student loan relief. Alternatively, Biden could let the student loan payment pause expire as planned, meaning student loan borrowers would resume student loan repayments within weeks. If Biden extends student loan relief, these are 5 things to expect. However, the student loan payment pause ends in less than 15 days, and Biden has remained silent. For previous extensions of student loan forbearance, student loan borrowers received longer notice. This could indicate that Biden has no plans to extend student loan easing. However, the Department of Education recently ordered student loan service providers to withhold sending student loan bills to borrowers. Here, the president extended each student loan payment pause:

Extension #1: On August 8, 2020, President Donald Trump extends the payment pause for the student loan until December 31, 2020.

Extension #2: On December 4, 2020, Trump extended the student loan payment pause to January 31, 2021.

Extension #3: On January 20, 2021, Biden’s first day as president, Biden extended the student loan payment pause through September 30, 2021.

Extension #4: On August 6, 2021, Biden extended the student loan payment pause to January 31, 2022.

Extension #5: On December 22, 2021, Biden extended the student loan payment pause through May 1, 2022.

Extension #6: On April 6, 2022, Biden extended the student loan payment pause to August 31, 2022.

“Yes, [the student loan payment pause] scheduled to end later this month,” Secretary of Education Miguel Cardona told CBS News. “While I have no announcement here today, I will tell you that we are in daily discussions with the White House and borrowers will hear from us directly and soon when a decision is made.”

Student loan forgiveness: historic relief for student loans

Biden is also considering historic student loan relief through a large-scale student loan foreclosure. Who Might Qualify for Student Loan Forgiveness? According to leaked internal documents from the Department of Education, the Biden administration is considering canceling $10,000 in student loans for all federal student loan borrowers. Student loan forgiveness could include direct loan borrowers, Parent PLUS loans, Grad PLUS loans, Perkins loans, and FFELP loans. Biden is also evaluating an income threshold of $150,000 for individuals or $250,000 for families. If the Department of Education has your income information, you can expect student loan forgiveness within 45 days. Otherwise, student loan borrowers could apply online and self-report their income, with student loan forgiveness possible in about 90 days. There’s no guarantee that Biden will issue a blanket foreclosure on the student loan. Since becoming president, however, Biden has forfeited $32 billion in student loans through targeted student loan foreclosures.

Student loans: next steps

Here’s what happens next if Biden cancels student loans or extends the student loan payment pause. Biden could make a dual announcement on both policies before Aug. 31, which could give borrowers worried about the ongoing Covid-19 pandemic and the uncertain economic outlook some breathing room. Biden is facing pressure from Republicans in Congress who have proposed a new blockbuster student loan forgiveness plan. Republicans say Biden has called in $400 billion in student loans — far too expensive for the federal government — and should end the student loan freeze immediately. Despite all the uncertainty about your student loan, your best strategy is to create a student loan repayment game plan. Neither the Bafög decree nor the Bafög payment pause are a long-term solution. Here are popular ways to pay off student loans and save money:

Student Loans: Related Reading

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