House Democrats recently passed the Build Back Better Act, President Joe Biden's signature spending bill with investments in key progressive causes like child care, health care and renewable energy.
While lawmakers are celebrating the passage of the trillion-dollar bill, some progressives have used this victory as a platform to again push Biden to cancel federal student loan debt.
Rep. Pramila Jayapal (D-Wash.) said on Twitter that passing Build Back Better "is a major step," but that it's "time to cancel at least $50,000 of student debt per borrower and get people the relief they need."
Jayapal wasn't the only Democrat to bring attention to the issue of student loan debt. Georgia Rep. Nikema Williams added that she "won't stop fighting to #CancelStudentDebt" in a Twitter post on Saturday.
Despite repeated calls to forgive student loans from high-profile lawmakers like Sen. Elizabeth Warren (D-Mass.) and Senate Majority Leader Chuck Schumer (D-N.Y.), it's unclear whether Biden will cancel federal student loan debt — or even whether he has the authority to do so.
Keep reading to learn more about student debt forgiveness, including your alternative debt repayment options like refinancing. Browse the table below to see current student loan rates from real lenders, and visit Credible to see your estimated interest rate without impacting your credit score.
Will Biden cancel student loan debt?
As a presidential candidate, Biden campaigned on canceling up to $10,000 worth of student debt per borrower. But enacting federal student loan forgiveness legislation has proven difficult to achieve.
While many progressive lawmakers have called on Biden to forgive student debt using his executive authority, other prominent Democrats have cast doubt on the extent of his presidential powers. House Speaker Nancy Pelosi (D-Calif.), for example, has previously said that student debt forgiveness "must be an act of Congress."
But passing debt cancellation measures through Congress would likely be a difficult task. Not all moderate Democrats are on board with forgiving student loans, and similar legislation like tuition-free community college was not included in the Build Back Better framework.
Still, progressive Reps. Ilhan Omar (D-Minn.) and Alexandria Ocasio-Cortez (D-N.Y.) continue to pressure the president to cancel student debt before federal student loan payments resume in just a few short months.
The Biden administration has said that borrowers should prepare for the COVID-19 administrative forbearance period on federal student loans to end on Jan. 31, 2022. Education Secretary Miguel Cardona added that borrowers should expect their payments to restart in February 2022.
If you don't feel financially prepared to resume debt payments, consider some of your alternative options like student loan refinancing. Visit Credible to compare rates across multiple lenders to see if you qualify for better terms on your college debt.
How to prepare for the end of federal student loan forbearance
The vast majority (89%) of federal student loan borrowers don't feel ready to resume payments in February, according to a recent survey. If you're among them, think about the following student loan repayment options:
- Enroll in an income-driven repayment plan (IDR). Federal student loan borrowers may be able to limit their monthly payments to 10-20% of their discretionary income through an IDR plan.
- Apply for economic hardship deferment. You may be eligible for up to 36 months of additional federal forbearance by filling out an economic hardship deferment form on the Federal Student Aid (FSA) website.
- Refinance your student loans to a lower interest rate. This can help you lower your monthly payments and save money on interest before federal loan payments resume.
Well-qualified borrowers who refinanced on Credible were able to lower their monthly payments by more than $250, all without adding to the total cost of interest over time. Take into account that refinancing your federal student loans into a private loan will make you ineligible for government benefits like IDR plans and select student loan forgiveness programs.
Decide if student loan refinancing is right for your situation by using a student loan refinance calculator. You can learn more about refinancing student loans by contacting an experienced loan officer at Credible.
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