share this article!

Joe Biden, the Vice President of the United States (AFP photo by MANDEL NGAN) (Photo courtesy of MANDEL NGAN/AFP/Getty Images)
Getty Images/AFP/AFP/AFP/AFP/AFP/AFP/AFP/AFP
Here are five choices if Biden extends student loan relief beyond September 30.
Here’s what you should know about it, as well as what it implications for your student loans.
Student loan forgiveness is set to expire on September 30, 2021. Student loan borrowers and members of Congress, on the other hand, are pleading with President Joe Biden to utilize his authority to postpone student loan relief. According to a recent poll, 90% of student loan borrowers believe they aren’t ready to start paying back their loans on October 1. Others claim that 18 months of student loan reduction and loan elimination have occurred. What will Biden do about student loan forgiveness?
Here are five possibilities:
The first scenario is that Biden does not extend student loan relief beyond September 30, 2021. This implies that starting October 1, 2021, federal student loan payments will be due again, and your regular interest rate will be reinstated. This is arguably the last option for many student loan debtors, but it appears to be the most likely situation in the absence of any news on extending student loan relief (which has yet to occur). Biden would claim that the economy is improving, that job growth is strong, that unemployment is low, and that vaccine rates are high. Furthermore, the majority of student loan debtors haven’t paid federal student loans since March 2020, giving them nearly 18 months of forbearance. Opponents of the decision argue that if student loan debtors aren’t financially prepared owing to the Covid-19 epidemic, it could lead to higher student loan default.

The second possibility is that Biden extends student loan relief, but only for a month. Because Biden is more likely to either not extend or extend for a longer duration, this is a low-probability alternative. The benefit of a one-month extension is that it gives student loan borrowers more time to organize their payments. This might be especially beneficial because the present student loan relief is set to expire in less than 90 days, and no announcement has been made on the resumption of student loan payments. The negative is that not much will change in a month. Yes, you’ll have more time to get your finances in line, but it won’t help you deal with the larger issue of the Covid-19 pandemic or other financial stresses.
ADDITIONAL INFORMATION FOR YOU

The third option is to extend student loan forgiveness till the end of the year. If Biden extends student loan relief, the end of the year would be a logical deadline and a clear marker for borrowers. Student loan payments could restart on January 1, 2022, if this option is chosen. As a result, a three-month extension would be preferable to a one-month extension. Borrowers of student loans would also have more time to adjust to paying student loan payments once more.

The fourth option is to prolong the grace period for student loans until March 31, 2022. Multiple members of Congress, including Senator Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer, support a six-month extension (D-NY). These members of Congress argue that students who owe money on student loans need more time to recover financially from the Covid-19 outbreak. This is the first time that student loan relief has been extended for this long. For example, after President Donald Trump extended student loan relief twice, Biden extended it for an additional eight months after taking office. If Biden extends student debt relief until this date, it will be almost two years of no federal student loan payments and zero percent interest rates. Biden’s difficulty is that such a protracted extension would contradict his administration’s commitment to economic recovery. On the one side, the financial situation would be so bad that student loan debtors would be unable to repay their loans. The economy, on the other side, is strengthening, with businesses reopening and new jobs being generated. Perhaps the two concepts can coexist, but communicating them may be difficult.

Biden’s sixth alternative is to continue student debt relief until the Covid-19 outbreak is over. This is a follow-up request from the same lawmakers that proposed the March 31, 2022 deadline extension. While student loan borrowers may prefer this option, it has a hazy deadline. What does it mean to say that the Covid-19 pandemic is over? Who decides this: the president, Congress, the Centers for Disease Control and Prevention (CDC), or the World Health Organization? Is this a data-driven conclusion or solely a personal opinion? The sentiment is clear: wait until the sky is blue again before proceeding, but knowing when that will be difficult for both student loan debtors and politicians.
Biden could go with one of these five alternatives or another. Again, the most likely scenario is that student loan forgiveness will expire on September 30. As a result, be ready to resume student loan payments as early as October 1. It’s also a good idea to make a student debt game plan now. Make sure you’re aware of all your options for repaying your student loans. Here are a few smart choices:

Biden may prolong student loan forgiveness beyond September 30, but he faces a significant problem.
Against Navient, a student loan borrower received $178,000 in loan cancellation.
The Supreme Court has denied the cancellation of student loans — here’s what happened.
Schumer wants to eliminate student loans, but new evidence shows that doing so benefits the wealthy./nRead More

share this article!