Biden to decide on three key student loan relief initiatives within weeks
Several key federal student loan forgiveness and relief initiatives are about to end. At the same time, the Biden administration is approaching a self-imposed deadline to decide whether or not to pass a broad student loan forgiveness. President Biden will have to make a decision on these initiatives very soon – likely within weeks.
Here is where things stand.
Student loan break ends in August
The pause in ongoing student loans is expected to end in just 37 days. The pause, which suspended payments and accrued interest on federal student loans held by the government for more than two years, was originally scheduled to last six months. But as the country grappled with the long-term impacts of the Covid-19 pandemic and associated economic turmoil, President Trump and President Biden repeatedly extended the payment pause. Biden’s final extension is set to end on August 31.
Unlike previous times the student loan break was set to expire, the Department of Education appears to be making little effort to notify borrowers of the impending return to repayment. That, combined with continued economic pressure coupled with the worst inflation American families have seen in decades, suggests that a further extension of the payment pause is possible, even likely. But top Biden officials have not bowed their hands. Ultimately, borrowers will need to be notified within weeks, if not days, of the fate of the student loan suspension.
Student Loan Forgiveness Decision by August
President Biden and top Education Department officials had expressed openness to some form of mass student loan cancellation in recent months. Biden campaigned on a pledge to support $10,000 or more in federal student loan forgiveness for most borrowers, but later expressed reluctance to write off larger amounts of student debt or rely on executive action (rather than congressional legislation) to implement it.
In April, Biden seemed closer than ever to making a decision on a broad student loan forgiveness, suggesting he would decide in a few weeks. Reports suggest senior officials were considering a $10,000 federal student loan forgiveness via executive action, with restrictions based on borrowers’ income levels.
But months have passed since then and the White House hasn’t said much publicly other than Biden who is still considering what to do next. Officials previously suggested Biden would decide on student loan forgiveness before the student loan hiatus ends. Biden himself seemed to confirm that last week, tell reporters that he would decide on a broad cancellation of the student loan “by the end of August”.
PSLF waiver ends in October
The Biden administration last year implemented the “Limited PSLF Waiver” initiative to expand access to the struggling public service loan forgiveness program, which can erase federal student loan debt for borrowers. who have worked in nonprofit or government jobs for 10 years or more. The initiative resulted in more than $8 billion in student loan forgiveness approvals, according to the Department of Education.
But the initiative is due to end on October 31. At that point, the PSLF program would revert to the original program rules, which had tripped up borrowers and student loan servicers for years, keeping approval rates hovering between 1 and 2 percent. Advocacy groups have urged the Biden administration to extend the waiver. But so far, the administration is still pushing back the Oct. 31 deadline.
“Now, until October 31, 2022, you may be able to receive credit for student loan repayments that were previously ineligible for PSLF,” the Department of Education said in a statement. Tweeter In Monday. “Learn more and submit your waiver.” The advisory echoes similar messages from senior Biden officials in recent weeks.
Biden has not indicated whether an extension of the limited PSLF waiver is under consideration, but he is expected to move quickly to extend it, given the approaching October deadline.
Further Reading on Student Loans
5 things student borrowers should do right now
The Biden administration approved $26 billion in student loan forgiveness, but borrowers face growing uncertainty
3 Key Student Loan Forgiveness Opportunities Could End Soon – Here’s How to Apply
If You’ve Been To These Schools, You May Qualify For Student Loan Forgiveness: Here’s What To Do