March 7, 2021

Jill On Money: Who benefits from student loan forgiveness? It’s complicated

The Department of Education (DOE) has granted the over 40 million Americans who have Direct federal loans and PLUS loans an extra month of breathing room. The extension of forbearance, the pause in accrual interest, and the suspension of collections activity will run through January 31, 2021.

Jill schlesinger

The decision should help borrowers prepare for what comes next. While President-Elect Joe Biden has not committed to any specific action on student loans, he is expected to further continue the freeze on payments and interest before considering his campaign policy education loan goals, which included: help for those undergrad borrowers who earn $ 25,000 or less; automatic enrollment in the income-based repayment program, with the opportunity to opt out if borrowers wished; and changes to the taxation of debt forgiveness. The Biden plan also contemplated canceling up to $ 10,000 in debt for students who work in national or community service.