White House confirms Biden will decide on student loan forgiveness and student loan payment suspension by August
There are good news for student borrowers who are waiting for a response on student loan cancellation and student loan payment pause.
Here’s what you need to know — and what it means for your student loans.
The White House confirmed on Tuesday that President Joe Biden will be decide whether to adopt large-scale student loan forgiveness and extend the student loan payment pause. The student loan payment break is set to expire Aug. 31, 2022, but the White House has not confirmed a specific date when Biden will decide. Federal student loan repayments have been on hold since March 2022, when Congress passed the Cares Act, which included historic student loan relief. President Donald Trump and Biden have extended the student loan moratorium six times through executive action. “He will make a decision,” White House press secretary Karine Jean-Pierre said, referring to Biden. “I’ll let him talk.”
Biden confirms decision on student loan forgiveness
Biden said he will decide whether to cancel the student loan by August 31, when the student loan payment break expires. Therefore, Biden linked the timing of his decision on student loan forgiveness and the student loan payment pause, even though they are separate policies. Biden has three major decisions on student loans — and three important deadlines. This includes finality of large-scale student loan cancellation, student loan payment pause, and limited student loan cancellation waiver. US Education Secretary Miguel Cardona has said Biden could extend the student loan payment break, as Biden has done four times before. As reported on Monday, the Department of Education has instructed student loan servicers not to send student loan borrowers their student loan bill now. That suggests Biden may be on the verge of announcing an extension to the student loan payment pause for federal student loans. Republicans in Congress have expressed concern that Biden has forgiven $400 billion in student loans. They have warned policy makers that the Department of Education is not ready for the cancellation of student loans.
Student loan forgiveness: Aggressive student loan forgiveness, but mom on broad student loan relief
Biden has actively pursued targeted student loan cancellation, but he has been relatively silent on large-scale student loan relief. For example, Biden has forgiven over $25 billion in student loans. This student loan relief includes $6 billion in recently canceled student loans through borrower defense until repayment. However, despite continued efforts by Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) to forgive $50,000 in student loans, Biden has been reluctant to commit to any extensive student loan waiver. Republicans have argued that large-scale student loan relief benefits wealthier student borrowers and will increase inflation. While the White House says Biden hasn’t decided how to proceed, it’s clear a decision is coming. Don’t guess how Biden will decide. Your best strategy is to prepare for the restart of student loan repayments and not to expect a large cancellation of student loans. While Biden may provide more relief, student loan forgiveness may be limited in scope, and any extension of the student loan payment pause will likely be temporary. Here are some of the best ways to save money and pay off student loans faster: