Extending the student loan repayment pause is unfair to most Americans who have not borrowed student loans, says this US senator.
Here’s what you need to know — and what it means for your student loans.
Sen. Joni Ernst (R-IA) says if President Joe Biden extends the student loan payment break, it would be both “unfair” and “shortsighted.” The student loan payment pause, which has lasted since March 2020, is scheduled to end on May 1, 2022. For the past two years, student borrowers have not been required to make federal student loan payments and interest rates. interest on student loans. have been set to 0%. Now, Biden is considering extending the student loan payment break for the fourth time during his presidency and the sixth time overall. (Biden could suspend student loans forever).
“This is a short-sighted and unfair deal for the vast majority of Americans who have not taken on debt and who will eventually be stranded [with] The law project. Let’s make sure students have a clear idea of these costs before taking out a loan [with] my STUDENT Act instead of forcing others to pay for it,” Ernst tweeted.
(Student loan cancellation and student loan payment suspension are confusing. Here’s what to know).
Student Loan Relief: An Alternative to the Student Loan Repayment Pause
Ernst thinks extending the student loan payment pause — which has collectively saved student borrowers $5 billion a month — isn’t the best public policy. Instead, she and Sen. Chuck Grassley (R-IN) have proposed new legislation known as the Student Transparency in Understanding Education Decisions (STUDENT) Act. The Student Act:
- provide student borrowers with an estimate of the total amount of interest they would pay over the term of their student loan;
- providing more transparency to student loans;
- implement a standard 10-year student loan repayment plan; and
- disclose the total amount of interest during or before borrowing a student loan.
Although the Student Act does not provide student loan relief, the proposed legislation will allow student borrowers to make better financial decisions before borrowing a student loan. It’s hard to believe there isn’t a law in existence that requires lenders to disclose the total interest owed based on a student loan repayment plan. With more transparency, student borrowers could make better decisions about which college or university to attend, how much student debt to borrow, and how long it would take to repay student loans.
(The new proposal would extend the student loan payment break and cancel student loans)
“Students and their families should have a clear picture of the true costs associated with their loans so they can fully understand their impact on their future,” Ernst said. “Giving them the tools to know what’s really going on with their federal student loans makes good sense and will help them make informed decisions.” »
Biden is expected to decide today on student loan payment suspension and student loan forgiveness
Biden is expected to decide on student loan payment suspension and student loan forgiveness today. This will give student borrowers more certainty so they can plan for their financial future. Once borrowers know if student loan repayments will be due after May 1, 2022, they can start making financial decisions to prepare for the restart of student loan repayments. Likewise, if student loans are not canceled, they can pursue alternative strategies for student loan repayment. There are indications that Biden could extend the student loan payment break. (Biden will forgive $6.2 billion in student loans). For example, White House Chief of Staff Ron Klain said Biden is considering options to extend the student loan payment pause and cancel student loans. The U.S. Department of Education has also asked student loan servicers to stop notifying student loan borrowers about restarting student loan payments after May 1. However, there are indications that Biden will not extend the student loan payment pause or cancel student loans. (Here’s who won’t qualify for $6.2 billion in student loan forgiveness). For example, Biden removed student loan forgiveness from his annual budget. Another potential option is for Biden to cancel student loans but end student loan relief.
Student loan repayments are expected to resume after May 1. Most importantly, evaluate all of your student loan repayment options so that you are fully prepared. Only you know your unique financial situation.
Here are some popular ways to pay off student loans faster: