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President Joe Biden could extend the pause on student loan payments beyond May and is still considering blanket student debt forgiveness for federal borrowers, a senior White House official said this week.
The Biden administration has remained largely quiet on the issue of student loan relief since it last extended the student loan repayment pause to May 1, primarily due to the rapid spread of the Omicron variant. COVID-19 and rising inflation. Biden did not mention student loan forgiveness in his State of the Union address on Tuesday, inspiring new concerns from advocates and borrowers that he is going back on one of his key campaign promises.
But White House chief of staff Ronald Klain suggested otherwise during an interview with can save america Thursday.
“The president will look at what we should do about student debt before the pause expires, or he will extend the pause,” Klain said during the podcast. “Whether or not there is any executive action [on] Forgiveness of student debt when payments resume is a decision we will make before payments resume.”
What does this mean for borrowers?
Although Klain’s comments suggest potentially significant developments for student loan borrowers, you shouldn’t change how you approach your student loan debt at this time.
Instead, stay the course. If you’ve been using this break to prioritize other aspects of your finances, keep doing it. In general, experts recommend using these extra months to help divert some money toward building an emergency fund or paying off more pressing high-interest debt, like credit cards or private student loans. If you think you’re in good financial shape and want to get ahead of your student loan debt, Robert Farrington, founder and CEO of The College Investor, recommends setting aside money in a savings account and making a lump sum payment. just before the payments start again.
Regardless, now is a good time to start planning when payments finally resume. For example, make sure your personal information in your accounts is up to date, such as your address, phone number, and email address, so you can stay on top of any new information about your loans. Review your payment strategy to see if it still makes sense for your current financial situation. You should also know how much you owe and double check payment dates and grace periods for each loan. Lastly, start budgeting for the future now for when payments resume. Take into account any changes in your income and see if you need to cut spending in certain areas to make room in your budget for upcoming student loan payments.
As of now, federal student loan payments will resume in early May, and experts say you shouldn’t set your strategy based on the perceived likelihood that more student loan relief is coming. But it’s something to watch out for over the next few weeks.