President Joe Biden Extends Student Loan Relief in 2021
Hey, guys THE NEWS TODAY Biden on student loans. We learned that Joe Biden will Instruct the department of education to Extend. The student loan payment Suspension through September of 2021.
Now, this extension of The zero dollar payment and the zero Interest means that borrowers Will does not have to make a payment until October 1st of 2021.
Of course, there’s still one big question Out there, still what is joe biden’s plan For loan forgiveness including, this idea Of ten thousand dollars forgiveness For everyone.
We’ll touch on that in a second so, we’ll be keeping a close eye. On these new changes with the stimulus Package especially With the news about student loans.
So, the previous extension of the Zero dollar student loan payment. Borrowers with federally held student Loans. We’re going to have to start Making payments By the end of January.
But early Wednesday, January 20th the biden team confirmed, That he will direct the Department of Education To extend the zero dollars. Zero-interest Payment provision through September of 2021.
Now for someone with 100 000 student Loans at six percent interest. This change to extend the zero dollars And zero percent interest provision. Will save that person forty-five hundred Dollars in interest alone over these Next Nine months.
Of course, that borrower will not have to make a monthly payment over The next nine months. So, they can build Their savings even more and bolster up Their Emergency fund or set aside those.
Would-be payments for the next Extension once, it ends or you can even apply that money towards the principal Of your student loan.
So that they get Out of debt even faster and for students Pursuing pslf All of those zero dollar payments that.
You’ve been making the past year along With these nine months of Zero dollar payments will count towards. That 120 qualified payments. so, this is Going to be a huge benefit If you’re pursuing a public service loan Forgiveness.
now probably the most Controversial part of the student loan discussion has been whether or not. Joe Biden will announce a widespread Forgiveness of ten thousand dollars In student loans for borrowers across The country. even though A ten 10 000 forgiveness provision was Not outlined in the 1.9 trillion-dollar Stimulus package.
That was unveiled last Week Senior officials of the Biden Administration say, that he still Supports forgiving Up to ten thousand dollars in student debt per borrower. Of course we, still Have folks like chuck Schumer calling on Joe Biden to forgive fifty thousand Dollars per borrower with a stroke of His pen.
A move that senator Elizabeth warren Also supports. But Biden has not made it clear whether Or not. He will pursue a massive fifty 000 Forgiveness option like this or not. We’re also waiting to hear what Biden’s Final plans are concerning the income Driven repayment programs Currently.
The lowest monthly payment on These plans are capped at 10 Of discretionary income but Biden is Proposing Cutting the payment to five percent of Discretionary income. Which would significantly lower payments For borrowers using. The income-driven repayment plan he also hinted at Revamping.
The pslf program allowing Public service workers to receive up to Ten thousand dollars of forgiveness per Year, for up to five years. So, if you have less than Fifty thousand dollars within five years, Qualified borrowers. Would have their Loans forgiven now. If you have more than Fifty thousand dollars of student loans.
You could still pursue this Ten thousand dollar per year forgiveness And also pslf to have. The remaining Balance forgave now. This is going to be really interesting to watch unfold. As it could provide an immediate relief To those, who are working in the Public Sector. But the question is, Will the provision allows for previous Years of experience and Retroactive approval of ten thousand Dollars of forgiveness, For each qualified year up to five years, Or will this The clock just start this year or today.
We’ll wait to see what he has to say that but until then if you’re benefiting From the student loan payment extension. Let me know in the comments. I hope that You’re able to set aside money and build up your emergency fund Or pay off loans or even just set it aside for future payments.
Once the Provision ends Either way. I’ll be keeping you informed On what we learned.