Student loan forbearance has been in place since March 2020 due to the COVID-19 pandemic. This allowed borrowers to pause their federal student loan payments and interest accrual without penalty. The current forbearance period is set to expire on May 1, 2022. However, there has been speculation about whether President Biden will extend the forbearance period.
Past Actions by Biden Administration
Since taking office, President Biden has taken steps to ease the burden of student loan debt on borrowers. Here are some of the actions he has taken:
Extended the student loan forbearance period until May 1, 2022: In January 2021, President Biden signed an executive order extending the student loan forbearance period until May 1, 2022.
Cancelled $1.3 billion in student loan debt: In March 2021, the Department of Education cancelled $1.3 billion in student loan debt for borrowers who were defrauded by their schools.
Proposed $10,000 in student loan forgiveness: President Biden has proposed forgiving $10,000 in federal student loan debt for all borrowers.
Speculation on Forbearance Extension
While there has been no official announcement, there has been speculation that President Biden may extend the student loan forbearance period again. Here are some factors that may influence his decision:
The pandemic is ongoing: While vaccines have been rolled out, the pandemic is still ongoing. President Biden may want to provide relief to borrowers who are still struggling financially due to the pandemic.
Economic recovery: President Biden has made it a priority to help the economy recover from the pandemic. Extending the forbearance period could help borrowers who are struggling financially to stay afloat and contribute to the economy in other ways.
Pressure from lawmakers: There has been pressure from some lawmakers to extend the forbearance period. For example, Senator Elizabeth Warren has called on President Biden to extend the forbearance period and forgive $50,000 in federal student loan debt.
What to Do if Forbearance is Not Extended
If the forbearance period is not extended, borrowers will need to resume their federal student loan payments on May 1, 2022. Here are some options if you’re not able to make your payments:
Apply for an income-driven repayment plan: Income-driven repayment plans base your monthly payment on your income and family size. This can make your payments more manageable.
Consider student loan refinancing: Refinancing your student loans can lower your interest rate and monthly payment. However, keep in mind that refinancing federal student loans with a private lender means you’ll lose access to federal benefits and protections.
Contact your loan servicer: If you’re having trouble making your payments, contact your loan servicer. They may be able to offer you a deferment or forbearance, or work out a payment plan that works for you.
While it’s unclear whether President Biden will extend the student loan forbearance period again, there are steps you can take to manage your student loan debt. Consider your options and reach out to your loan servicer if you need assistance. By staying informed and taking action, you can make progress towards paying off your student loans and achieving financial stability.