From student loan forgiveness to student loan forgiveness, more student loan relief could look like this

More student loan relief might look like this.

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

Student loans

President Joe Biden shocked everyone when he extended student loan relief for another 90 days after the Biden administration said there would be no more temporary student loan forbearance extensions. . Now, with the ongoing Covid-19 pandemic and pressure from Democrats in Congress to cancel student loans, there could be more student loan relief. If Biden enacts more student loan relief, it could look like these options:

Biden could extend temporary student loan forbearance by several months

If Biden decides to enact more student loan relief, the most likely scenario is that Biden would extend the student loan payment break for the fourth time. (Here’s why Biden extended student loan relief). If that happens, and there’s no guarantee it will, it would mark the sixth extension of the temporary student loan forbearance of the Cares Act, which is the $2.2 trillion stimulus package that Congress passed. and which President Donald Trump signed into law in March 2020. Biden could extend student loan relief for several months. For example, his last extension was from February 1 to May 1, so he could consider another 90-day extension. Alternatively, it could extend for a shorter period (such as 30 days) or a longer period (such as 120 days). Biden will likely assess several factors, including the progress of the Covid-19 pandemic and the state of the US economy, among other considerations. (What Biden’s latest student loan relief means for your student loans).

Biden could extend student loan relief until Covid-19 pandemic ends

Some progressive members of Congress want Biden to extend student loan relief until the Covid-19 pandemic ends. While those lawmakers are happy with the latest 90-day extension, some say it’s insufficient to protect struggling student borrowers in the wake of the Covid-19 health emergency. Their solution is to extend temporary student loan forbearance indefinitely, which would allow the most vulnerable student borrowers to recover financially and generate additional cash flow to pay living expenses, pay off debt, and start building. a financial future. The decision also comes at a time when student loan interest rates are likely to rise in the coming year. Despite these demands from progressives, Biden is unlikely to extend student loan relief until the Covid-19 pandemic is over.

Biden could cancel up to $10,000 in student loans through executive order

While Biden has suspended student loan payments, advocates really want student loans forgiven. In the coming weeks, expect more rhetoric about large-scale student loan cancellations from Democrats in Congress as well as civic and social organizations. Supporters say large-scale student loan forgiveness will boost the economy, reduce disparities, help struggling borrowers and allow young Americans to marry, start families, buy homes and save for their retirement. Biden has been consistent in his stance on large-scale student loan forgiveness. He supports up to $10,000 in student loan forgiveness, but he doesn’t believe he has the executive power to forgive student loan debt through an executive order. To date, Biden has not enacted any large-scale student loan forgiveness and it does not appear that he intends to do so in the short term. (Here’s how to qualify for automatic student loan forgiveness).

Biden could cancel up to $50,000 in student loans through executive order

Would Biden forgive up to $50,000 in student loans? It’s no secret that Senate Majority Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA), Rep. Alexandria Ocasio-Cortez (NY), Rep. Ayanna Pressley (D -MA), Rep. Ilhan Omar (D-MN) and others voiced support for widespread student loan forgiveness of up to $50,000 for student borrowers. (Here’s how to get student loan forgiveness during the Biden administration). However, if Biden ever tries to forgive all borrowers’ student loans through an executive order, he’s unlikely to be considering up to $50,000 in student loan forgiveness. Biden has never backed that amount of student loan forgiveness, nor does Biden appear willing to change his position. (Biden will not cancel student loans until student loan relief ends).

Biden could encourage Congress to pass legislation to cancel student loan debt

As president and presidential candidate, Biden has consistently called on Congress to forgive up to $10,000 in student loans for student borrowers. Biden never said he would directly forgive $10,000 in student loans. On the contrary, as a former U.S. senator, Biden knows Congress has the power to pass student loan forgiveness legislation. As such, Biden urged Congress to provide more student loan relief to student borrowers. Biden has said he’s ready to forgive student loans for millions of student borrowers, but Congress has failed to pass any student loan forgiveness. If Congress passes this student loan legislation, Biden said he would easily sign any bill into law.

Biden could adopt more targeted student loan forgiveness

If Biden enacts more student loan relief, he could continue to focus on targeted student loan forgiveness. For example, the Department of Education will forgive $2 billion in student loans within weeks. Biden is likely to follow through with a targeted student loan forgiveness to build on his strategy to date. Biden has canceled $12.7 billion in student loans since becoming president. This includes student loan forgiveness for government officials, student borrowers with total and permanent disabilities, and borrowers who have been misled by their college or university. Biden’s strategy for student loan forgiveness has been targeted at specific student borrowers rather than all student borrowers. Biden could continue to forgive more student loans to these groups of affected borrowers, or he could target new constituencies.

Student loans: next steps

What are the next steps for your student loans? Most importantly, get ready to pay off your student loans now. There is no guarantee that Biden will extend student loan relief again. The most likely scenario is that this is the final extension of student loan relief and that Biden will no longer extend temporary student loan forbearance. Therefore, expect to resume student loan payments from May 1. While Biden may extend the student loan payment break, prepare as if he won’t. Make sure you understand all of your options and get started now. Here are some popular ways to pay off student loans faster:

Student Loans: Related Reading

Biden extended student loan relief, but advocates really want student loans forgiven

Student loans could be on hold, but here’s why Biden extended student loan relief

How to qualify for automatic student loan forgiveness

Biden won’t cancel student loans until student loan relief ends