President Joe Biden is not ready to announce a decision on student loan forgiveness.
Here’s what you need to know — and what it means for your student loans.
Student Loans
More than 40 million student loan borrowers are anxiously waiting for Biden to announce a decision on potential historic student loan relief. However, if you’re hoping for a decision on wide-scale student loan cancellation today or tomorrow, you’re out of luck. The White House confirmed on Tuesday that Biden isn’t “ready” to announce any decision on student loan forgiveness. Previously, Biden said he would announce a decision on student loan cancellation before the expiration of the student loan payment pause on August 31, 2022.
Student loan cancellation: White House confirms Biden not ready
In a press briefing with reporters Tuesday, White House Press Secretary Karine Jean-Pierre answered this question on student loans:
Question: “When it comes to student loans and the current pause on the payments — they’re set to expire at the end of the month — a lot of borrowers told us that they feel they’ve been left in limbo, making it difficult to plan financially. Is there any update on that expected? When can they expect that? And would it possibly just be another extension, or what else is on the table for that?”
Karine Jean-Pierre: “So the President spoke to this when he was asked, I think about two weeks ago, about the student loan and his decision. He said by ‘the end of August.’ So we’re still kind of at the beginning, getting into the middle of August. So when he’s ready to make that decision, we will let you know.”
“[A]nd we have been very clear on this: Like, the President understands how student loans could affect a family and — and how the pressure of that can really be a lot and put a lot of weight on a family’s purse or economic situation. So, we understand that. He is making — he is going to make his decision on this, and when he has something to say, we will share that.
Student loan payment pause ends in days
The student loan payment pause ends in days. With the end of the student loan moratorium, student loan borrowers will restart federal student loan payments on September 1, 2022. It’s unclear why Biden hasn’t shared any plans on either wide-scale student loan forgiveness or a potential extension of the student loan pause. There could be several plausible explanations. First, Biden may not have decided on either student loan policy. Second, Biden could be waiting to assess the political impact of any potential decision on student loans, which could affect the midterm election in November. Third, Biden could wait for more economic data to determine if inflation will decrease. Regardless of the underlying reason, time is running out. With student loan payments set to restart in days, student loan borrowers hope to avoid a nightmare scenario of no student loan cancellation and the end of the student loan payment pause.
Student loan forgiveness: what’s at stake
Progressive Democrats want wide-scale student loan forgiveness of $50,000 and an extension of the student loan payment pause. If Biden cancels student loans, here’s what happens next. Also, here are 4 things to expect if Biden enacts wide-scale student loan cancellation. Leaked internal documents from the U.S. Department of Education show a proposal for Biden to cancel $10,000 of student loans for federal student loan borrowers who earn less than $150,000. Here’s who could qualify for student loan forgiveness. The plan doesn’t include an extension of the student loan moratorium. However, before his announcement, Biden could alter this plan, choose a new plan, or forgo wide-scale student loan forgiveness. Without clear guidance for student loan repayment, student loan borrowers should assume the student loan moratorium will end on August 31 and prepare for the restart of student loan payments. What’s the best way to save money on your student loans? Start with these 3 options to pay off student loans faster:
- Student loan refinancing (lower interest rate + lower payment)
- Income-driven repayment (lower payment)
- Student loan forgiveness (federal student loans)
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