Biden Extends Student Loan Relief Until May 1, 2022
- On December 22, 2021, the White House announced the extension of the student loan relief plan until May 1, 2022.
- In the statement, President Joe Biden stated that he would extend the relief period for an additional 90 days, to provide breathing room for those with student debt.
On December 22, 2021, the White House official website released President Joe Biden’s statement regarding student loan payments. The Biden administration mentioned extending the student loan relief for an additional 90 days until May 1, 2022.
Extension of the Student Loan Relief Plan
In the statement released by the White House, President Biden stated that extensions of student loan repayments were due to the ongoing economic conditions. He noted that the pandemic was still affecting the United States economy, and re-starting the student loan payment process was coming at a premature time.
Thus, the Biden administration extended the student loan forgiveness period until May 1, 2022, giving many American people more time to reorganize their finances.
What Could it Mean for Those with Debt?
In total, 30% of the American population currently has some amount of outstanding student debt. The announcement may allow those affected to have a financial plan in place once student loan servicers begin collecting student loan payments in May.
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For those with large amounts of student loans, it is essential to have a plan in place in order to pay back student loans when the time comes around.
Preparing to Repay Student Loans
Once May 1, 2022 rolls around, there is a high chance that the federal government will resume monthly payments. As these monthly payments could negatively impact your financial position, it is vital to research and find ways to ensure these payments do not severely impact your financial status.
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Here are a couple of ways to minimize monthly payments or shorten your loan repayment period when payments resume.
Income-Driven Repayment Plans
The first way to reduce your monthly payments is to fill out an application for an income-driven repayment plan through the federal student aid website. This plan will ensure that your monthly payments towards student loans are fair, depending on the number of people in your household and your monthly income.
By signing up for this plan, you are permitting a specified portion of your monthly income to be applied towards the repayment of your student loans.
Public Service Loan Forgiveness Program
The second method to lower your monthly payments or the length of your repayment period is through the Public Service Loan Forgiveness Program. This program assists individuals who choose to work full-time in public service for a qualified employer. In exchange, after making 120 minimum payments on your student loans, the remaining balance will be forgiven as an incentive for working to pay off your debts.
Will Biden Cancel Student Loans?
As of right now, Biden has canceled $11.5 billion worth of debt for specific groups of people. These include people who have a total and permanent disability or fall under the borrower's defense to repayment, meaning that their education was fraudulent and their institutions misled them.
Biden has shown his support for loan cancellation and wishes to forgive up to $10,000 for each person with an outstanding balance. However, although he has advocated for loan cancellation, the choice is not up to him. Instead, he must wait for the United States Congress to draft and approve legislation that gives him and the respective departments to forgive student loans.
Therefore, it is crucial not to depend on the possibility of loans being forgiven. Instead, try to find ways that will allow you to pay back your loans comfortably, such as through the programs listed above.
What are your thoughts on Biden extending the student loan relief? Do you think it will get extended again? Let us know in the comments below.
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