No, Biden Won’t Extend Student Loan Relief Again

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No, President Joe Biden will not extend student loan relief beyond January 31, 2022.

Here’s what you need to know – And what this means for your student loans,

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A group of Democratic senators wrote a Letter On Monday, Biden said temporary student loan relief from the COVID-19 pandemic should be extended “through the period of a public health emergency.” They are concerned about the emergence of the Omicron version of COVID-19 and its potential financial impact on the economy and student loan borrowers. In the absence of any extension, temporary student loan forbearance will expire on January 31, 2022 and federal student loan borrowers will resume student loan payments beginning February 1, 2022. Despite this request, which members of Congress have made repeatedly during the COVID-19 pandemic, don’t expect Biden to extend this student loan relief. Why here?

1. Biden says he will not extend student loan relief again

The US Department of Education has clarified that this is the final extension of student loan relief. (Biden also won’t cancel student loans before student loan relief ends). Congress passed the CARE Act – a $2.2 trillion stimulus package – in March 2022 to provide substantial student loan relief to more than 40 million federal student loan borrowers in response to the COVID-19 pandemic. This includes, among other benefits, no need to make federal student loan payments and temporarily setting federal student loan interest rates at 0%. While this student loan relief was only set to last six months, President Donald Trump extended student loan relief twice through executive action. Similarly, Biden twice extended this temporary student loan until January 31, 2022. While Biden could have changed his mind, it’s unlikely at this point, making the definitive announcement that there would be no further expansion. There has been no public indication from the Biden administration that there is even an option for an expansion idea. (How to Apply for Limited Student Loan Forgiveness).

2. Student debt relief letter is more symbolic, but has little chance of implementation

The group of senators are well-intentioned and want to help student loan takers. Elizabeth Warren (D-MA), who did not sign the letter, has been a leading champion on student loan repayment and student loan forgiveness. (Here’s who qualifies for student loan forgiveness right now). His colleagues who signed the letter share these sentiments and believe that giving student loan payment relief will ease the financial burden of millions of student loan borrowers who are suffering from the COVID-19 pandemic. (The Biden administration just announced major changes to student loan forgiveness). The extra savings from not making student loan payments can help pay for living expenses, other debt, retirement and other living costs. That said, both Trump and Biden have based on the “end of the pandemic” extension based on a specific date, rather than an open-ended, undefined extension. These senators know that the Biden administration is unlikely to extend student loan relief indefinitely. The example shows that if there was an extension, it would be date-specific. Previously, members of Congress have called for specific extensions beyond January 31, 2022, including extensions to both March 31, 2022 and September 30, 2022. For some reason, there is no specific date in this letter. (How to Qualify for Automatic Student Loan Forgiveness).

3. Student loan borrowers will get $110 billion in student loan cancellations

As the senators noted in their letter, student loan borrowers have saved $5 billion each month during the COVID-19 pandemic as a result of this student loan relief. For 22 months, that totaled $110 billion in student loan cancellations for the millions of student loan borrowers who have almost no new student loan interest on their federal student loans for two years. This is a substantial savings by any measure. The $110 billion student loan cancellation is in addition to the $11.5 billion student loans that Biden has canceled since becoming president. Beyond the prior extension of this student loan relief, the Biden administration has not supported executive action on wide-scale student loan cancellations. That said, Biden has asked Congress to cancel student loans of up to $10,000 for borrowers. Biden has been careful to balance the needs of student loan borrowers and federal spending, and likely equal scale in determining whether to extend student loan relief. (Student loans worth $2 billion will be canceled within weeks).

What this means for your student loans

What does this mean for your student loans? Expect student loan repayment for your federal student loans to start again on February 1. Although the potential impact of O’Micron is not fully understood from an economic point of view, the Biden administration is focused on economic recovery and rebuilding the economy in the wake of the COVID-19 pandemic. , A further extension of student loan relief — while certainly financially beneficial to student loan borrowers — could scuttle efforts to portray a recovering economy. While Biden can always change his mind before January 31, it is unlikely. So, make sure you are ready. Understand all your options for student loan repayment. Here are some popular ways to save money and pay off student loans faster:

Student Loans: Related Reading

Biden won’t cancel student loans before student loan relief ends

How to Qualify for Automatic Student Loan Forgiveness

How to Apply for Limited Student Loan Forgiveness

Education Department to cancel $2 billion student loans


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