President Joe Biden may be closer to canceling some student debt, but it likely won’t be as much as some Democrats had hoped.
"I am considering dealing with some debt reduction," Biden told reporters at the White House Thursday. "I am not considering $50,000 debt reduction."
On the campaign trail, Biden talked about canceling $10,000 worth of student loan debt per borrower. While he has since asked Congress to pass a bill to cancel that debt, he has also not ruled out doing so through executive action. Now, borrowers could soon have an answer on the president’s plan for debt forgiveness.
"I am in the process of taking a hard look at whether or not there will be additional debt forgiveness and I will have an answer on that in the next couple of weeks," Biden said.
Private student loans won't be eligible for a federal debt forgiveness plan, but borrowers could consider refinancing to lower their monthly payments. You can visit Credible to find your personalized interest rate in minutes without affecting your credit score.
Psaki says Biden will make a decision before payment pause ends
Since taking office, the president has forgiven more than $17 billion in student loans for borrowers who qualify for certain programs such as Public Service Loan Forgiveness, according to the Department of Education.
He has also extended the federal student loan payment pause several times, with it currently set to expire on August 31st. While Biden at this point has not issued widespread cancellation, the White House said it expects to have an answer before the payment pause expires.
At the White House press briefing last week, press secretary Jen Psaki said the president is considering student loan cancellation and will soon have an answer. She said that Biden "would make a decision about any cancellation of student debt before the conclusion of that pause on student loans."
If you have private student loans and don't qualify for federal forgiveness programs, you could consider refinancing to save on your monthly payment. Visit Credible to compare multiple student lenders at once and choose the one with the best interest rate for you.
How to manage your student loans amid forgiveness uncertainty
While federal borrowers await the Biden administration’s decision on student loan forgiveness, now is a good time to prepare for payments to resume in a few months.
"The Department of Education is committed to ensuring that student loan borrowers have a smooth transition back to repayment," Secretary of Education Miguel Cardona said when the payment pause was announced. "This additional extension will allow borrowers to gain more financial security as the economy continues to improve and as the nation continues to recover from the COVID-19 pandemic.
"During the pause, we will continue our preparations to give borrowers a fresh start and to ensure that all borrowers have access to repayment plans that meet their financial situations and needs," Cardona continued.
However, private student loan borrowers aren't eligible for federal protections, so they don’t qualify for the payment pause and won’t qualify for any federal student debt cancellation.
But there are steps that private student loan borrowers can take to keep their monthly payments down, such as refinancing to a lower interest rate. To see if this is the right option for you, you can contact Credible to speak to a student loan expert and get all of your questions answered.
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