Biden and Administration announced student loan repayment pause extension again. Repayment is on hold until The US Department of Education is permitted to implement the debt relief program or the litigation is resolved. Payments should start back up 60 days later. If the program still isn’t put into effect or litigation is resolved by June 2023- payments will resume 60 days after. This is relief and good news for millions of borrowers who were due to start repaying their loans back in the beginning of the new year. The loan repayment has been has been put on hold since March 2020. Since the freeze, interest has stopped accumulating; leaving the government with over $155 billion debt bill.
What will be the final outcome? No one knows. We hope Biden and administration come to an agreement and bring relief to millions of borrowers; especially for the ones who have suffered enough during this Pandemic. Keep in mind, if Biden’s Student loan forgiveness program gets approved, individuals will see the following take place:
*Individual borrowers who earned less than $125,000 in 2020 or 2021 $10,000 forgiven
*Married couples or head of household who made less than $250,000 – $10,000 forgiven
*Those who have received a Pell grant with loans can get up to 20,000 forgiven
If you’ve already filled out the student loan forgiveness application, you will receive this email stating that there is a pause on the decision for forgiveness.
What can you do in the meantime?
You can wait it out or take advantage of the interest freeze and start paying towards the principal. The forgiveness program isn’t 100% a definite decision. Try to focus on getting out of debt and keep your spending low. Things are constantly changing in this economy. Plan accordingly.
