The hope of a student loan forgiveness will not pay the bills. Here’s what you can do instead | Personal finance
Is forgiveness still possible?
The crucial details of any potential forgiveness offer remain unclear. The decision to go through Congress rather than using executive action means that every facet is up for debate.
For example, we do not know if there will be an income threshold to be eligible or if it would be a general rebate. There’s also no plan for qualifying borrowing: Would parent or graduate PLUS loans get a discount – or FFEL or Perkins off-the-shelf loans, for that matter? It seems that private student loans are no longer the order of the day.
Even the pardon amount could change: Future Senate Majority Leader Chuck Schumer, DN.Y., and Senator Elizabeth Warren, D-Mass., Have proposed a more ambitious overall pardon of $ 50,000 in the fall latest. But that seems less likely to pass in a divided Senate.
“It doesn’t look like there will be a massive pardon given the concerns of the more conservative Democrats in the Senate,” said Robert Kelchen, associate professor of higher education at Seton Hall University in South Orange, New Jersey.
“A modest forgiveness could happen,” he said.
Federal payment break should be extended
Right now, federal student loan borrowers don’t have to make payments due to an interest-free break, called forbearance, which has been in effect since March 13 and twice extended by President Donald Trump . It is set to expire on Jan.31, but Biden’s transition team has said he intends to extend the current federal student loan forbearance from day one.