Boy, oh boy, is it our luck day! Not only do we have a new president who’s already making big moves towards the pandemic (finally!), but he’s bringing in economic relief to those often unregarded: college students!
On January 20, 2021, in his first day of office, President Biden — it sounds just wonderful typing that — passed an executive order further delaying student loan payments. That’s eight months – to be specific – free of federal loan payments, with zero interest accruing and no defaultment until at least September 30, 2021.
This order extends a policy that was originally put in place by the Trump administration, but the September end date offers more stability after Trump’s shorter, more frequent extensions.
It also offers borrowers options. With defaults and interest frozen, borrowers can chose to save the money they’d normally put towards these loans instead, or use it towards other debts. If they have the extra cash flow and prefer to pay down the principal payments to save on interest, now would be the time. A win-win, in my opinion, and so much better than Trump’s slow rollout for student loan deferment.
It’s a step in the right direction for sure, but many are still waiting on an announcement from President Biden regarding loan forgiveness. It’s up for debate whether he can sign an order for forgiveness on his own, but according to Forbes, this deferrment may signal that Congress or Biden won’t be cancelling student loans in the short term, if at all.
For now, let’s bask in this victory – we’ll just have to wait and see if forgiveness comes.