- The government of President Joe Biden extends the pause in student payments until January 2022
- The White House announced that those with student debt will not have to resume their payments until February of next year.
- The Biden administration clarified that this will be the final extension
GOOD NEWS. The government of President Joe Biden extends the pause in student payments until January 2022 and does so just in time since the term they had granted expired next month.
The White House announced that those with student debt will not have to resume their payments until February next year, as the pause in federal student loan payments will be postponed until January 2022, CNBC reported.
Biden government extends pause in student payments until January 2022
Despite the good news of receiving more time to pay off debts, the Biden administration clarified that this will be the final extension, so that the recipients of this aid must resume their payments in February 2021.
With the arrival of the pandemic, since March 2020, the government offered students to pause the payment of their monthly bills. This would not generate interest for debts, or additional payments, but would be a help in the middle of the difficult financial situation.
Millions of beneficiaries
42 million students decided to take advantage of the opportunity, 90% of the possible beneficiaries of these loans. However, about 66% of borrowers indicated in a survey by The Pew Charitable Trusts that they would not be able to resume their payments again.
This is why several of the Democrats and advocates pressed President Biden to give them more time to rebuild their finances. The pressure paid off, but they have asked for more help for the borrowers.
More help: Forgive up to $ 5,000 of debt
“We are pleased that the Biden administration has heeded our call to extend the pause in student loan payments held by the federal government, providing tremendous relief to millions of borrowers facing a disastrous financial gulf,” says a statement from Chuck Schumer. Senate Majority Leader Senator Elizabeth Warren and Representative Ayanna Pressley.
But they not only expressed their gratitude for the government’s decision, they made a new request to President Biden: forgive up to $ 50,000 of student debt. “While this temporary relief is welcome, it does not go far enough … We look forward to hearing the administration’s next steps to address the student debt crisis,” they added.
More expenses for Biden administration
At the suggestion, Biden has asked the Department of Justice and the Department of Education to verify if they have the legal authority to comply with the request to discharge the student debt. The outcome of that review is still unknown, the NY Journal reported.
Currently, student loan debt in the United States is more than $ 1.7 trillion. This makes it an even greater debt than what citizens in the United States accumulate with credit cards and car loans.
How to qualify for a federal student loan
1 Determine if you are eligible to apply for a federal loan. One of the main requirements to obtain a student loan is to be enrolled in an eligible program at least part time, in addition to being a US citizen or being considered eligible to receive the loan.
In addition, it is essential to maintain a satisfactory grade point average and demonstrate the need to access the loan, by filling out different forms.
2 Estimate how much you can receive
This will depend on the university you want to access, which will provide online tools to calculate the financial aid to which the future student has access.
There, you will have to answer specific questions that take into account the number of family members of the student, the degree of studies to which you want to enroll and the contribution that this has in the family budget.
3 Make a budget of how much you can afford
Before applying for a student loan, a key piece of information to consider is the amount of money you have and how a particular payment plan will affect a person’s finances.
The questions to ask when preparing this budget should consider a person’s expenses, the reductions that can be made in other expenses, and an emergency plan in case of going through a financial crisis.
4 Fill out the FAFSA
To complete the FAFSA form, it is necessary to have data such as social security number, copies of tax returns, proof of income and bank statement, among others, on hand.
The FAFSA forms must be completed and submitted before 11:59 pm Central Time on June 30, 2021. If there is any update in the information, the deadline will be September 11, 2021.
5 Accept your loan
What is the best option to accept a student loan? The Federal Student Aid program suggests that the best way to optimize resources is by creating a hierarchy in the financial aid received.
Thus, the first thing that must be accepted will be scholarships and subsidies, that is, free money; then you find the money earned through work-study programs; lastly, the money borrowed through federal student loans is located. Biden government extends pause in student payments until January 2022.