The Biden administration won’t extend student loan relief and confirmed student loan payments restart February 1, 2022.
Here’s what you need to know.
White House Press Secretary Jen Psaki confirmed to reporters during a press briefing that the Biden administration won’t extend student loan relief — and the student loan payment pause will end January 31, 2022. (No, Biden won’t extend student loan relief again). Here are some highlights from her comments:
- “In the coming weeks, we will release more details about our plans”
- “We will engage directly with federal student loan borrowers to ensure they have the resources they need and are in the appropriate repayment plan.”
- “We are still assessing the impact of the Omicron variant.”
- “A smooth transition back into repayment is a high priority for the administration.”
- “The Department of Education is already communicating with borrowers to help them to help to prepare for return to repayment on February 1.”
- “41 million borrowers have benefitted from the extended student loan payment pause, but it expires February 1, so right now we’re just making a range of preparations.”
Student loan relief: this won’t sit well with progressives and advocates
Progressive members of Congress, leading advocacy groups and student loan borrowers have lobbied President Joe Biden to extend the student loan payment pause beyond January 31, 2022. They cite potential financial devastation for millions of borrowers if temporary student loan forbearance isn’t extended. Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) say that 89% of student loan borrowers feel financially unprepared to restart student loan payments. They also argue that nine million student loan borrowers in default will suffer further financial detriment. With other U.S. senators, they have pressured Biden to postpone the return to student loan payments for at least several months and at most until the end of the Covid-19 health emergency. Despite these pleas, the Biden administration seems definitively focuses on ending this student loan relief on January 31.
Student loan cancellation won’t happen either
Some student loan borrowers have hoped that Biden will deliver a last-minute financial lifeline by enacting wide-scale student loan cancellation. However, there is no indication that Biden will cancel everyone’s student loans. Therefore, don’t expect Biden to cancel student loans before student loan relief ends. On the contrary, Psaki provided an update on Biden’s actions to date to enact student loan forgiveness. Since becoming president, Biden has cancelled $12.5 billion of student loan debt for approximately 640,000 student loan borrowers. When questioned by a reporter about the Biden administration’s plans to help student loan borrowers, Psaki made no mention of any future plans for wide-scale student loan forgiveness. Psaki’s posture has been consistent with Biden’s in that the president supports wide-scale student loan cancellation of up to $10,000, but Congress should pass legislation on mass student loan forgiveness.
With less than 60 days remaining until the end of temporary student loan relief, it’s essential that you understand all your options for student loan repayment. Here are some popular options to save money on your student loans:
- Student loan refinancing (lower interest rate + lower monthly payment)
- Income-driven repayment plans (lower payment, but same interest rate)
- Public service loan forgiveness (student loan forgiveness for public servants)
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