If Biden Extends Student Loan Relief, Expect These 5 Things
Here’s what happens next if President Joe Biden extends the student loan payment pause.
Here’s what you need to know – and what it means for your student loans.
Student Loans
President Joe Biden has only 15 days to decide whether he will extend the student loan payment pause for more than 40 million student loan borrowers. Absent any extension, student loan payments will restart on September 1. Biden has remained silent on whether he would extend student loan forbearance, which student loan borrowers have enjoyed since March 2020, when Congress passed historic student loan relief. If Biden extends the student loan payment pause, here are 5 things that could happen next.
1. Biden would announce an extension of the student loan payment pause
If Biden extends the student loan payment pause for a record seventh time, Biden would make a formal announcement in the coming days. The student loan payment pause expires on August 31, 2022. This means Biden has less than two weeks to announce whether he will extend student loan forbearance for millions of student loan borrowers. If Biden extends this student loan relief, he would use his executive authority as
2. Education Department will notify you of more student loan relief
Once Biden formally extends student loan relief, the U.S. Department of Education will notify you in writing. So, don’t worry if you miss an announcement on Biden’s potential extension of the student loan payment pause. The Education Department should contact you directly and post the details on its website and through Federal Student Aid. Your student loan servicer also will have the latest information on student loan forbearance.
3. Student loan payments could restart in months
If Biden extends the student loan payment pause, you should expect student loan forbearance to last for several more months. Republicans say Biden could extend the student loan payment pause beyond November to encourage voters to elect Democrats in the midterm election on November 8. For example, rather than expire on August 31, the student loan payment pause could be extended through December 31, 2022. Alternatively, if Biden doesn’t want to restart student loan payments on January 1, 2023 — a federal holiday — he could extend the student loan payment pause through January 31, 2023.
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4. Biden will decide on student loan forgiveness
The student loan payment pause isn’t the only major decision on student loans. Biden has three major decisions on student loans. Most importantly, student loan borrowers want to know whether Biden will enact wide-scale student loan forgiveness. Republicans have proposed their own blockbuster plan for student loan forgiveness. Biden said he would announce his decision on student loan forgiveness before August 31, when the student loan payment pause expires. While Biden could make separate announcements, it’s more likely Biden will announce his decisions on both policies regarding student loans together. That said, borrowers want to avoid a nightmare scenario of no student loan forgiveness and no extension of the student loan payment pause.
5. Student loan payment pause would still be temporary
Even if Biden extends student loan relief, it would only be temporary. Yes, you may get a few more months of no mandatory student loan payments. However, if you’re expecting a “permanent” student loan payment pause, guess again. Federal student loan payments will restart eventually. If Biden extends student loan relief now, this could be the final extension. That’s why you should prepare a game plan for your student loans now. Understand all your options for student loan repayment. Here are some of the best ways to pay off student loans faster and save money: