President Donald Trump (Photo by Drew Angerer / Getty Images)
What are the latest updates on your student loans?
This is what you need to know.
Student loans
Let’s review the latest updates on your student loans so you are fully informed:
Will the Cares Act student loan relief be extended?
As of March 13, 2020, the Cares Act, the $ 2.2 trillion financial stimulus, provided several benefits for its student loans, including:
However, the Care Law did not include any forgiveness of student loans. Will Congress extend these student loan benefits? There are three options for student loan relief that Congress can consider:
- Don’t extend student loan debt relief.
- Extend student loan debt relief until October 31, 2020.
- Extend student loan debt relief until December 31, 2020.
If Congress extends these student loan benefits, they are unlikely to extend until 2021.
Student loan refinance rates are at record lows
Student loan refinance rates have fallen to record lows and start as low as 1.99%. Student loan refinancing is the process of combining your federal student loans, private student loans, or both into a new single student loan with a lower interest rate. The goal of student loan refinancing is to save money and pay off student loans faster. You can choose a variable or fixed interest rate, and you can also choose a loan term between 5 and 20 years to pay your student loans.
This student loan refinance calculator shows you how much you can save when you refinance student loans.
Student loan interest rates are at record lows
It is also much cheaper to borrow new student loans for college or graduate school. Rates for new student loans have dropped to a record low. New federal loans for undergraduate students are 2.75% and new rates for graduate students are 4.30%. Private student loans may have even lower interest rates.
Joe Biden: Pay off student loan debt
Former Vice President Joe Biden launched a comprehensive student loan plan, which includes student loan forgiveness and college without tuition. In the wake of the Covid-19 pandemic, Biden proposed a Covid-19 student loan forgiveness plan to pay off up to $ 10,000 in student loan debt for each borrower. Biden would excuse all undergraduate tuition from public two and four year colleges and universities. Biden would also forgive all undergraduate tuition for borrowers who earn $ 125,000 or less per year and who graduate from private historical education institutions (HBCU) and minority institutions (MSI). Through public service loan forgiveness, Biden would also forgive $ 10,000 a year in student loan debt for up to 5 years for a total of $ 50,000 in student loan forgiveness.
Will I get student loan forgiveness?
“Will I get student loan forgiveness?” It is a popular question on the minds of many student loan borrowers. While Biden’s plans could become law, it is important to focus on current proposals in Congress. There are several proposals in Congress to cancel student loan debt.
Student Debt Crisis, a major student loan debt-focused nonprofit, delivered a petition with 1.2 million signatures to the former presidential candidate for Senator Elizabeth Warren (D-MA), one of the leading advocates of the student loan forgiveness, to pay off student loan debt in the wake of the Covid-19 pandemic.
Will the new stimulus package include student loan relief?
Given all of these proposals, will the new stimulus package include student loan forgiveness? Senate Majority Leader Mitch McConnell is expected to present a new stimulus package this week. Based on this key timeline for the new stimulus package, Congress could finalize the new stimulus package by August 7. However, don’t expect student loan forgiveness in the new stimulus package. Why? Senate Republicans, who control the Senate with 53 seats, do not support a plan to pay off student loan debt. That doesn’t mean you will never get student loan forgiveness, just don’t expect it now. There are still other ways you can get student loan forgiveness. For example, you can receive student loan forgiveness through income-based repayment plans, as well as public service loan forgiveness. A new game changer for student loan forgiveness also makes it easier for those seeking public service loan forgiveness. Senate Republicans, who want to limit federal spending, also focus on other economic priorities in addition to student loan forgiveness, such as second stimulus checks.
Proposal: cancel student loans in bankruptcy
Representative Mary Gay Scanlon (D -PA) introduced new legislation last week that would make it easier for you to discharge bankrupt student loans if you are having financial difficulties and have been affected by Covid-19. The COVID-19 Student 5 Loan Relief Act of 2020 would apply to both private student loans and federal student loans, and would be available to all Americans affected by Covid-19. That said, depending on your income level, you would have to show a loss of income of 20% to 40% to qualify under this student loan proposal.
How to pay student loans
As Congress considers legislative proposals to pay off student loan debt, make sure you have a game plan for paying off student loans. Start with these four options, all of which have no fees:
Resources: student loans
15 secrets to refinance student loans
5 student loan changes for 2020
Second stimulus check: your questions answered
What Trump and Biden think about their student loans
Second stimulus check: your questions answered
Trump wants at least $ 2 billion for the next stimulus
5 ways to get student loan forgiveness
Navient Settles a Lawsuit: What It Means for Your Student Loans
Student loan refinance rates are incredibly cheap
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