Here are 3 important deadlines that every student loan borrower should know.
Here’s what you need to know — and what it means for your student loans.
Student loan borrowers should be aware of three deadlines that will impact 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. Wide-scale student loan cancellation
Wide-scale student loan cancellation is one of the most significant decisions of Biden’s presidency. Supporters say it will stimulate the economy, reduce disparities, 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 enacted wide-scale student loan cancellation. There has been speculation that Biden will cancel up to $10,000 of student loans for borrowers, but the White House has denied that Biden has made a decision. Progressive members of Congress are still pushing the president to cancel $50,000 of student loans. While Biden hasn’t agreed to broad student loan forgiveness, Biden has canceled more than $25 billion of student loans. This includes targeted student loan cancellation, including $6 billion of student loans canceled last month. Biden has said he plans to announce his decision on wide-scale student loan cancellation within the coming weeks. So, student loan borrowers can expect Biden’s announcement in August.
2. Student loans: restart of student loan payments
Student loan payments for federal student loans have been paused since March 2020. That’s when Congress passed the Cares Act, the $2 trillion stimulus package. This historic student loan relief 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 restart on September 1, 2022. However, Biden hasn’t indicated whether he will extend the student loan payment pause beyond the August 31 expiration date. U.S. Secretary of Education Miguel Cardona says Biden may extend the student loan payment pause again. That said, Republicans want Biden to restart student loan payments to save money for the federal government and to fight monster inflation. Biden likely will decide the future of student loan payments in August so that borrowers have sufficient time to prepare.
3. Student loan forgiveness: limited waiver
The Biden administration instituted a limited waiver in October 2021 that is a game-changer for student loan forgiveness. Through October 31, 2022, student loan borrowers can “count” previously ineligible student loan payments toward student loan forgiveness. This one-time exception allows student loan borrowers to get credit for late student loan payments, partial student loan payments, and student loan payments made under the wrong student loan payment plan. While the limited waiver for student loan forgiveness is slated to expire in October, Biden has already proposed a permanent extension of the limited waiver for student loan forgiveness. How? Biden proposed major changes to student loan forgiveness through the Education Department rulemaking process. Over the next 30 days, student loan borrowers and the general public can comment on Biden’s proposals for student loan forgiveness. Then, the Education Department will finalize the new rules for student loan forgiveness and implement the final policies by July 1, 2023.
The restart of student loan payments, the prospect of wide-scale student loan cancellation, and the extension of the limited waiver will significantly impact your wallet. As these deadlines approach, ensure you understand all your options for student loan repayment. Here are some of the best ways for you to save money and pay off student loans faster:
- Student loan refinancing (lower interest rate + lower payment)
- Income-driven repayment (lower payment)
- Student loan forgiveness (federal student loans)