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After several nail-biting days, former Vice President and current President-Elect Joe Biden has been declared the winner of the 2020 presidential election. For student loan borrowers, Biden’s election could mean big changes for federal student loans, including the possibility of mass student loan forgiveness.
Note that all of these are preliminary suggestions, and there’s no guarantee that any of them will come to pass, especially without bipartisan support in Congress. But here’s what could be possible when it comes to Joe Biden and student loans:
President-elect Joe Biden on student loans: What he’s proposed so far
Joe Biden and higher ed: Free tuition and expanded Pell Grants
Will mass student loan forgiveness happen?
Managing your student loan debt in 2020 and beyond
Joe Biden has stated his support for a number of student loan ideas. To date, he has said he supports:
- Immediate cancellation of $10,000 in federal student loan debt for every borrower to help them through the coronavirus pandemic
- Full forgiveness of federal student loans for borrowers who attended public colleges or universities and earn less than $125,000 per year
- Simplification of the current income-driven repayment plan options, including a plan that caps your monthly payments at 5% of your discretionary income if you make more than $25,000 per year (currently the lowest cap is 10%). If you make less than $25,000, you could pay $0 on your loans.
- Reform of the Public Service Loan Forgiveness program so that it offers $10,000 in loan forgiveness annually for up to five years. Currently, the PSLF program offers total loan forgiveness at the end of 10 years of service. Biden’s proposal would front-load loan forgiveness so you wouldn’t have to wait so long, but it doesn’t appear to offer loan cancellation beyond $50,000.
- Revive borrower protections that once made it easier for borrowers to discharge student loans through bankruptcy
Additionally, we should forgive a minimum of $10,000/person of federal student loans, as proposed by Senator Warren and colleagues. Young people and other student debt holders bore the brunt of the last crisis. It shouldn’t happen again.
— Joe Biden (@JoeBiden) March 22, 2020
Besides student loans, Biden has also said he supports the following for higher education:
- Free community college to all students, including DREAMers
- Tuition-free public college for students whose families make less than $125,000 per year
- Increase Pell grants, which are a form of need-based financial aid, and make them more accessible
- Increase investments in Historically Black Colleges and Universities (HBCUs) and workforce training programs
While not a comprehensive list, these are some of the main suggestions for student loans and higher education that Biden ran on as the Democratic nominee. If they will come to pass remains to be seen.
Student loans have entered the spotlight in the past few years with millions of Americans owing more than $1.64 trillion in education debt. While mass student loan forgiveness once seemed like a pipe dream, the idea seems to be becoming more mainstream.
Supporters of student loan forgiveness argue that forgiving student loans will boost the economy, as it will allow debt-burdened borrowers to participate more fully in it. But fiscal conservatives worry that the price tag is too high.
At this point, we’ll all have to wait and see what happens with student loans during a Joe Biden presidency. Even if he supports mass student loan forgiveness, Joe Biden may or may not get that same support from Congress.
Since mass student loan forgiveness isn’t guaranteed, it’s important to have a plan for managing your student loans in 2020 and beyond.
At the time of writing, federal student loans are in a period of emergency forbearance due to the coronavirus pandemic. This means you don’t have to make payments, and zero interest is accruing.
But this period of forbearance is set to run out at the end of December 2020. Mark this date on your calendars so you know when to expect new payments again (and keep an eye out to see if Trump or Biden extends it). In the meantime, explore your options for repayment plans to find the right one for you.
Even though payments aren’t due right now, you could consider making payments during this period of forbearance. No interest is currently accruing, so you could make faster progress paying off your loans than you would normally.
As for private student loans, your payments are likely still due as they are normally, but some lenders are offering temporary forbearance for borrowers who qualify. Reach out to your loan servicer if you need some relief.
Finally, borrowers who are motivated to pay off their debt ASAP could consider refinancing their private student loans for lower rates and new terms. Learn more about the ins and outs of student loan refinancing in this guide.
Want better rates? Here are the best banks to refinance student loans:
|Variable rates start at...||Fixed rates start at...||Repayment terms||Welcome bonus||Check your rates|
|1.98%||2.99%||5 - 20 years||$200||Visit LendKey|
|1.99%||2.98%||5 - 20 years||$200||Visit Earnest|
|1.89%||2.80%||5, 7, 10, 15, and 20 years||$120||Visit Laurel Road|
|1.92%||2.49%||5 - 20 years||$100 or $200, depending on the amount you refinance||Visit Credible|
|2.25%||2.99%||5, 7, 10, 15, and 20 years||$100||Visit SoFi|
|2.39%||2.79%||5, 7, 10, 15, and 20 years||$100||Visit ELFI|