President Joe Biden (Photo by Drew Angerer / Getty Images)
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Biden may extend student loan relief beyond September 30, but there is one major dilemma.
Here’s what you need to know.
Student Loans
There are currently two parallel avenues for your student loans. The first – student loan cancellation – is about the possibility of extensive student loan cancellation at least for some student loan borrowers. However, the hope of a comprehensive cancellation of the student loan does not seem to be short-term. With a focus on the infrastructure plan and no news from the Biden administration about the possible timing, the student loan termination appears to be pending. The second – and more immediate option – is the ability to extend Student Loan Facilitation beyond September 30, 2021 when the following expires:
- No federal student loan payments;
- Federal student loan interest rates fixed at 0%; and
- No collection of federal student loans in arrears.
Without an extension of this relief for student loans, payments of the federal student loan will be due from October 1, 2021.
Will Biden extend this student loan relief?
The case for extending student loan facilitation is clear and goes something like this: Student loan borrowers are still facing financial problems with the Covid-19 pandemic and it’s too early to pay student loans. There are other reasons for delaying student loan payments as well, but this is a major one. According to a new survey, as of October 1, 90% of student loan borrowers will no longer be willing to repay student loans. However, the word “ready” could refer to “financially ready” or “psychologically ready” or both. Opponents of extending student loan relief say student loan borrowers have not received federal student loan payments for 18 months. They argue that this equates to a monthly student loan cancellation of $ 5 billion – according to the US Department of Education. In total, student loan borrowers will have more than $ 90 billion in student loan canceled during the Covid-19 pandemic. This student loan waiver is on top of the $ 3 billion Biden has canceled since taking office. Opponents say extending the student loan facility has a direct cost, even if the Covid-19 pandemic has been traumatic on several fronts, both economic and otherwise.
Relief for student loans: Biden’s dilemma
Despite the arguments on both sides, Biden faces an even bigger dilemma regarding extending the student loan facility beyond September 30th. Biden is well aware of the arguments on either side of the extension of relief. On the one hand, extending student loan facilities would help student loan borrowers squeeze student loan debt caused by an unprecedented pandemic. On the flip side, there is a cost of student loan facilitation – and as noted by the Department of Education – it is more than $ 5 billion per month during the Covid-19 pandemic. The bigger problem for the president, however, is what symbolizes the extension of the student loan waiver. Biden is leading an economic recovery. It is politically difficult to say that the economy is recovering, employment is strong and jobs are being created. Then, at the same time, say that the economy is struggling so hard that student loan borrowers do not have to pay student loans after 18 months of student loan relief. The news is contradicting itself. However, not every decision in Washington is politically based, and advocates of extending student loan facilities will say it puts people before politics. However, it will be difficult for the president to argue that the economy is recovering, but at the same time to say that this is not the case for student loan borrowers. This does not mean that Biden will not extend the Student Loan Facilitation beyond September 30th as it is a possibility, but it does have to put a strain on the Biden Administration as they consider the next steps on Student Loans.
Even if student loan relief is extended, keep in mind that it is only temporary. You will still owe your student loan when the payments resume and your interest rate will be fixed. Because of this, it is important that you get your student loans under control now. Get a game plan for a student loan. Here are some smart options:
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source https://collegeeducationnewsllc.com/biden-may-extend-student-loan-relief-beyond-september-30-but-theres-one-major-dilemma/
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