Make no mistake about it. The student loan debt crisis has been out of control for a long time. So, if you are one of the 42 million Americans who have student loan debt, recent news about President Biden finally addressing this issue might be on your mind. 

During his first day in office, President Joe Biden signed an executive order to extend the pause on federal student loan payments to September 30, 2021 (Update: the pause on payments is now extended through January 2022). But you probably also remember that, during the campaign trail, the idea of canceling or forgiving student loan debt came up once or twice (read: a whole lot).

So, where do those plans for student loan debt relief stand now that Biden is officially in office? And should you keep making payments on your student loans?  

Well, there are no definitive answers just yet. But, in this post, we’re going to look at everything you need to know right now. 

Specifically, we’ll answer the questions:

  • What is President Joe Biden doing to address the student loan debt crisis?
  • Will the pause on student loans be extended again after January 2022? 
  • Is Joe Biden forgiving or cancelling student loan debt?
  • Does Joe Biden support Elizabeth Warren’s or Bernie Sanders’s student loan debt plan?
  • Should you keep making payments on your student loans or wait?

What is President Joe Biden doing to address the student loan debt crisis?

Administrative forbearance are the words to know. And they have been since March 2020 when former President Trump signed into law the CARES Act, which included several measures to help American citizens facing financial difficulties due to the ongoing Covid-19 pandemic. 

At the time, the pause on student loan payments was only set to last until September 2020. But in August it was extended through December. Then, in December, it got extended again through January 2021. And then Biden extended it again through September 2021.

So, we’re sure you by now you have at least some idea of what administrative forbearance means. But, since Biden’s executive order just extended this plan again through January 2022, let’s do a quick refresh. 

With all federal student loans in administrative forbearance, that means: 

  • You don’t need to make any payments on your federal student loans owned by the Department of Education
  • Your balance won’t go up because, for the time being, there’s a 0% interest rate on your federal student loans
  • None of this applies to private student loans

Now, having your student loans in administrative forbearance is great for taking those monthly payments off your list of things to worry about. The only problem: it’s a temporary solution. 

Is it likely that the pause on student loans will be extended again?

Nope — at least not right now. The Biden administration has said this latest extension is the last. And the Department of Education wants borrowers to use this time to prepare for when payments resume next year.

Now, as you know, the student loan debt crisis isn’t going to magically disappear before or after January 2022. But there is still some hope that a more impactful change might be coming soon…

Potential plans to forgive or cancel some student loan debt

Nationally, Americans owe $1.68 trillion in student loans. Does Biden plan to cancel all of that debt and bring that balance down to zero? Not likely — especially since, as VERIFY shows in the video below, Biden has never said he would do that. 

But there is hope for some student loan debt relief. According to the official Biden Plan for Education Beyond High School, the president does support:

  • Forgiving $10,000 of federal student loans per borrower, regardless of income
  • Revising the federal student loan income-based repayment plans so that: 1) borrowers making over $25,000 per year only have to make monthly payments that are 5% of their discretionary income 2) borrowers making $25,000 or less per year don’t have to make any payments on their undergraduate federal student loans and also won’t accrue any interest on those loans
  • Canceling federal student loans that are tuition-related for people who graduated from public colleges, historically black colleges and universities, or minority-serving institutions, and who earn less than $125,000 per year
  • Creating a new program that offers $10,000 of undergraduate or graduate student debt relief for every year of national or community service, up to five years
  • Forgiving the debt held by individuals who were deceived by the worst for-profit college or career profiteers

To date, Biden’s only acted on a few of those initiatives, directly cancelling around $3 billion of student loan debt for borrowers that fall under various categories. It just may not be the kind of student loan debt you have.

So, when exactly will the plan to forgive $10,000 of student loan debt per borrower happen? No one knows for sure.

What is sure, though, is that some politicians don’t think Biden’s plans go far enough to help borrowers struggling with debts. Can you guess which politicians? 

What other politicians think about Biden’s plans to address the student loan debt crisis

When you hear the words “cancel student loans”, who comes to mind? For many, it’s the Democratic politicians who have helped popularize this idea. You know, people like Senator Elizabeth Warren, Senator Bernie Sanders, and Congresswoman Alexandria Ocasio-Cortez.

So, what are some of their thoughts about Biden’s potential plans to address the student loan debt crisis? 

Democratic Senators Elizabeth Warren and Chuck Schumer have started putting pressure on Biden to forgive more than just $10,000 per borrower. These senators want Biden to use his executive powers to forgive $50,000 in federal student loan debt per borrower. 

But, for better or worse, Biden’s already made it clear that he opposes this plan. Recently, Speaker of the House Nancy Pelosi has said Biden doesn’t have the power to use executive action to cancel student loan debt even if he wanted to. And without executive action, it’s pretty unlikely to happen.

Still, there is hope for the $10,000 forgiveness plan. And if that’s close to the amount you currently owe, the question “should I continue paying my student loans?” becomes all the more important. 

Should you pay off your student loans or wait for forgiveness? 

With all this talk about student loan forgiveness, it’s understandable that you might be thinking about waiting to see what happens before you make another payment. But should you? Well, it depends…

For one, if you owe over $10,000, then it’s probably a good idea to keep making payments on your student loans. As we mentioned already, it’s highly unlikely that the Biden administration will cancel all of your student loan debt. 

And, it’s definitely a good idea, if you can, to take advantage of the 0% interest rate during the forbearance period. Doing so will help you pay off your student loans even faster since you’d get to make payments directly toward your principal balance. 

If, however, your student loan balance is below $10,000, then that’s a decision only you can make. You could wait and see what happens. But, if you do, just make sure you’re prepared to potentially start making payments again once the current forbearance period ends in January 2022. 

Final Thoughts

With Biden now in office, the student loan debt crisis looks like it might finally be addressed on a national level. But that doesn’t mean you should expect all of your student loan debt to go away. 

For now, it looks like there’s a good chance $10,000 of student loan forgiveness per borrower could happen soon. And things like a restructuring of income-based repayment plans, and debt relief programs for particular groups could follow. 

In the meantime, you’ll need to decide if continuing to make student loan payments makes sense for you. And if you need some extra help, be sure to check out Scholly’s 2021 Covid-19 Relief Fund