President Joe Biden wants student loan borrowers to do 3 things during student loan relief.
Here’s what you need to know – and what it means for your student loans.
Your federal student loan payments may be temporarily suspended until May 1, 2022, but that doesn’t mean you have to sit back and relax. As of March 2020, over 40 million student loan borrowers have received the following student loan benefits:
- no mandatory federal student loan payments;
- no new interest accrued on student loans; and
- no collection of defaulted student loans.
Biden has extended student loan relief for 90 days in response to the Covid-19 pandemic and the persistence of the Omicron variant. (What Biden’s Latest Student Loan Relief Means for Your Student Loans). In announcing the fifth extension of the Cares Act student loan relief, however, Biden encouraged student loan borrowers to do 3 things with their student loans to prepare for the restart of student loan payments. (How student loan payments will be easier in 2022).
1. Take advantage of the US Department of Education’s student loan resources
The US Department of Education has several resources that can help you prepare for restarting student loan payments. (Here’s how to get a student loan discount during the Biden administration). For example, you can learn about income-based repayment plans, forbearance, deferral, and other ways to pay off student loans. You can start on the Department of Education website to learn more about student loan cancellation, student loan consolidation, student loan services, and student loan default. You can also log into your student loan account through Federal Student Aid (FSA) to check your student loan balance and manage your student loans.
2. Evaluate student loan repayment based on income
Income-driven repayment plans are a good option for federal student loan borrowers who are having financial difficulty repaying their student loans. There are four main income-based repayment plans: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE) and income-tested reimbursement (ICR). Income-based repayment plans set your monthly federal student loan payment based on your discretionary income, family size, and state of residence. It is possible to get a monthly student loan payment as low as $ 0. (More student loan relief may be coming). For more information, contact your student loan manager. With an income-based repayment plan, it is also possible to get a student loan forgiveness after 20 years (for undergraduate student loans) or 25 years (for graduate student loans) of monthly student loan payments. . If you’ve already signed up for an income-based repayment plan, be sure to update your income, family size, and state of residence at least once a year so that your student loan payments reflect your unique financial situation.
3. Explore the Public Service Student Loan Exemption
You may not be working in the public service, but you want to if you want to pay off your student loans faster. Congress created the Public Service Loan Forgiveness program in 2007 to help federal borrowers obtain forgiveness on their student loans. (Biden will not cancel student loans until student loan relief ends). To qualify, you will need to meet several requirements including working for a qualified utility or non-profit employer, making 120 monthly student loan payments. , by joining an income-based repayment plan. While the civil service loan waiver program at one point rejected 99% of applicants, the Biden administration made major changes to the program to help more student loan borrowers get their loan waivers. student loan. Until October 31, 2022, student loan borrowers can submit a limited waiver to “count” past student loan payments that were not previously eligible. The public service loan forgiveness program is always available, so if you are interested, you may consider a career working for a qualified public service or non-profit employer. Contact your student loan manager for more details. (How to qualify for the automatic student loan exemption).
Will Biden cancel student loans?
Student loan forgiveness advocates may support all 3 of these things, but their focus is more on Biden enacting large-scale student loan forgiveness. In Biden’s announcement of the extension of temporary student loan relief, Biden made no reference to canceling student loans. While it is possible, don’t count on a full-scale student loan cancellation. You had better prepare yourself financially for the restart of student loan payments and understand all of your options to save money and pay off student loans faster. Here are some popular ways to pay off student loans faster: