The Biden student loan forgiveness plan: What does it mean for your Student debts?

Biden student loan forgiveness

The Biden student loan forgiveness plan…

The biden student loan forgiveness plan has become a popular topic of debate for many Americans with student loans. In his famous speech to congress, President Biden called on both Democrats and Republicans to pass his proposal for student loan debt forgiveness. This legislature that will see millions of Americans attend community college for and be able to attain up to 10k student loan forgiveness.

Additionallt, President Biden notably championed several student loan debt forgiveness programs on his campaign trail, promising massive student loan debt forgiveness as part of his COVID-19 relief plan.

While millions of Americans will potentally benefit from Joe Biden’s student loan plan, the question is of whether they are practically applicable coupled with the fact that a lot of the promises made are yet to be fulfilled remains a constant.

In this article, we will discuss extensively the Biden student loan forgiveness plan, review what has been done, what remains undone, and give you the best advice regarding what to do if the 10k student loan forgiveness plan never becomes a reality.

Will Biden forgive Student loans?

The “will Biden forgive Student loans” question is on the lips of most American consumers and newsoutlets. Agreably, Biden made a notable move regarding student loan debt forgiveness on his very first day in office when he extended the pause on federal student loan payments all through to September. Since then, the DOE, working hand-in-hand with the Biden student loan forgiveness plan has addressed the colossal issue of student debts with three major moves. They are:

1. Student loan debt forgiveness for about 72,000 borrowers who were defrauded by for-profit schools.

2. Student loan debt forgiveness for over 41,000 borrowers with disabilities.

3. The recent extension of the scope of payment pause to 1.14 million borrowers with private student loans.

On the other hand, Joe Biden’s student loan plan is yet to fulfill a few of its crucial pre-election promises regarding student loan debt forgiveness to the more than 81 million people who voted for him. On his campaign trail and official website, Joe Biden’s student loan plan promised to:

1. “Immediately” cancel $10,000 per person in student debt: During the President’s campaign, his official website said that he would work with Democrats to authorize the 10k student loan forgiveness plan for each individual as part of the proposed COVID-19 relief strategy. However, the $1.9 trillion stimulus package he approved in March makes no mention of the 10k student loan forgiveness promise.

2. Cancel debts for undergraduates in public colleges and HBCUs: President Biden also pledged student loan debt forgiveness for tuition-related federal student loan debts by borrowers in the $125,000 annual income bracket. This plan was focused on Historically Black Colleges and Universities (HBCUs), and other minority-serving institutions and would help address the racial wealth gap within the American student loan crisis. Sadly, no announcements pointing towards the execution of Joe Biden’s student loan plan for minorities and HBCUs have been released by the Department of Education.

Student loan forgiveness 2021: What’s next for you?

With this realization of the situation of student loan forgiveness in 2021 and Biden’s non-fulfillment of some vital promises regarding his Biden student loan forgiveness plan, here are a few crucial steps you need to take to protect yourself:

1. Take a break from your monthly payments for now when necessary, as the consequences (interests) for the non-payment of your debts are temporarily suspended.

2. Don’t rely on complete loan forgiveness: While relying on the prospect of having a whopping $10,000 taken off your student debt is enticing, relying entirely on the prospect of 10k student loan forgiveness is not practical.

3. Take advantage of the current interest freeze to make principal-only payments on your loan amount: Since the interest rates on student loans are practically non-existent at the moment, now may be a good time to resolve your student loans at a 0% interest rate.

4. Put your money in a high-yield savings account until September: If you are trying to take advantage of the possible 10k student loan forgiveness, the smartest option would be to make your monthly payments to a high-yield savings account while you wait to see what happens. Using this strategy, you will be able to take advantage of the 10k student loan forgiveness program if it happens or make payments on your outstanding student debt if it does not.

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