Cash Rules

Student loan forgiveness is officially on the ballot – what we know so far

words by: Natasha Marsh
Feb 1, 2021

A couple months ago, President Joe Biden called for Congress to forgive a minimum of $10,000 off federal student loans per borrower as part of the Coronavirus Relief Bill. It asked for cancellation of monthly student loan payments for the duration of the crisis and for the US Department of Education to make payments for us, with a guaranteed $10,000 payoff.

 

Unfortunately, Congress didn’t pass this bill, instead federal student loans have accrued no interest and providers have frozen collections. But now with Democrats taking control of both chambers of Congress, student loan forgiveness could be a real possibility. So what can we expect now that Biden has been sworn in?

 

The current student loans package (frozen collections and no interest) expired yesterday, January 31, and cancelling the $10,000 will likely be spoken about immediately. Biden has rumored to forgive student loans in their entirety after a specific period of time, depending on payment history and income. Under his plan, individuals who make $25,000 or less wouldn’t be required to make payments on their undergraduate federal student loans. Individuals that make more than $25,000 would be required to pay five perfect of their discretionary income towards their loans. After 20 years of payments, the loans would be forgiven.

 

The plan is now on the ballot, up for consideration. So unfortunately, nothing is settled yet but things are in motion. For more information, visit studentaid.gov. We’ve also put together some tips on how to pay off your student loans.