Will The Student Loan Pause Payment Be Extended Again?

Will The Student Loan Pause Payment Be Extended Again?

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Will there be another Extension?

The payment pause and interest waiver on  federal student loans has been in effect  for quite some time maybe even longer  than we realised so is it going to be  extended again  for the sixth time inquiring minds. Want  to know here’s what we found out  hey guys it’s justine with a college  investor investing in personal finance  for millennials let’s talk about this  payment pause and interest waiver  because we have all been enjoying  not being required to make any payments  there’s no interest accruing on those  federal student loans and so it gives  you the flexibility to either pay those  down while there’s no interest or  refocus and shift that debt payment to  something else in your personal finances. Now at the time of this recording that  waiver is set to expire on may 1st 2022.

How long has the waiver been in effect?

It means that this pause this  waiver has been in effect for 26 months  just over two  years and that accounts for roughly  125 billion dollars of waived interest.

Can the waiver be extended legally?

Can the  payment pause be extended further well  according to the heroes act of 2003 any  kind of waiver or modification to this  type of program can only be approved in  connection with a national emergency and  because the pandemic was declared a  national emergency. We’re still able to  see those extensions of the student loan  payment and interest waiver again and  again because we are still in this  national emergency.

How many PSLF viewer are in Student Loan pause?

There’s  also a limited public service loan  forgiveness waiver that’s extended  through october 31st of 2022 and because  this modification was allowed because we  have a national emergency. It may  indicate that the biden administration  will also push and extend this waiver  one more time for everybody with federal  student loans until october 31st of 2022. But this really is all up to president  biden and whether or not he will  continue this for a sixth time.

How borrowers currently feel in student loan pause?

in fact  according to a cnbc student loan survey  29 of borrowers believe that repayment  will resume on may 1st and 26 believe  the president will extend the payment  pause again, 28 believe some student loans will be  forgiven and 14 believe that all student  loans  will be forgiven. I don’t see that  happening but that’s just me also some  other interesting statistics that came  out of this survey is that 19 of  republicans support forgiveness of all  student loans compared with 43 percent  of independents and 46 percent of  democrats. There are also some divisions  based off of demographics more women  than men support student loan  forgiveness plus black and hispanic  survey respondents are more likely to  support student loan forgiveness than  white and and asian respondents younger  responders are more likely to support  student loan forgiveness 45 of genz and  43 of millennials versus 32 of gen x and  23 of baby boomers plus low income  respondents and borrowers who owe more  than others that don’t are more likely  to be in favour of student loan  forgiveness that makes sense right like  if you’re the person who’s going through  this and it’s really difficult for you  to pay off those loans you would  definitely be in support of some sort of  forgiveness program.

How waivers are Driven?{reason of stuent loan pause}

All this to be said  the most recent extension of the payment  and interest pause really was driven by  politics and not policy. A lot of people  thought that student loans and  employment would get back to  pre-pandemic norms by the end of 2021 in  a lot of ways it has kind of returned to  pre-pandemic levels the unemployment  rate for january 2022 was just at four  percent which was the same as it was in  january 2019. Before the pandemic also  deferment forbearance delinquency and  default are all at the pre-pandemic norm  normal rates so with all this  normalisation coming into place and  seeing hey like borrowers actually can  get back to making their student loan  payments. It does kind of make you  question whether or not we’re actually  going to see a sixth extension though  with the pandemic and the recent omicron  variant that popped up there’s always  going to be a little bit of that  hesitation  because we just don’t know what this  pandemic is going to do and how long  it’s going to last with these new  variants popping up.

How Democrates and republicans feel?

 it’s a  house divided some democrats really want  to see another extension some want just  a blanket student loan cancellation for  everybody and then there are others who  are just not into it at all in fact  representative virginia foxx of north  carolina said that ”president biden’s  latest extension is a troubling trend  toward blanket student loan forgiveness’‘  which would be a massive mistake with  major consequences for borrowers and  taxpayers.

Broad students loans forgiveness

A broad student loan  forgiveness can only be authorised by  congress this cannot go through just a  loan executive order from president  biden. There really has to be approval  from congress and who knows if we’ll  ever see that happen so the path forward  may be based off of some political  decisions and that really kind of is  unfortunate because  i think the decision should be based off  of how many people how many borrowers  this actually impacts.

What borrowers can do in Student Loan Pause?

what can  you do as a borrower right now well we  know in fact that this extension is  going to end may 1st 2022.  There’s a couple of ideas that you can  play around with if you have no  emergency fund and you have high  interest debt  perhaps you focus on those as a goal  first paying down that high interest  debt while this debt is just dormant and  on a freeze until may focus on setting  aside extra money for an emergency fund.  God forbid you lose your job you  experience an accident your cell phone  breaks you have the funds set aside that  prevents you from going into debt.  You’ll also want to focus on high  interest debt such as credit cards  because we know that interest is  accruing very rapidly whereas the  student loan debt is just dormant and  you can focus on that when the time  comes you can also sock away cash so  that when the payments come back into  play. you already have some cushion to  kind of ease yourself back into making  those monthly payments again  next you’ll want to focus on your budget  know exactly what income is coming in  what expenses are going out including  your debt payments you’ll want to make a  written list of all of your debt and all  of your fixed and fun expenses so you  know exactly what to calculate and  budget for accordingly.

Will the Student Loan Pause Extension actually happen?

 i don’t think you  can really bank on broad student loan  forgiveness just yet and i don’t think  you can bank on there being truly an  extension until it happens. so always  plan for worst case scenario and hope  for the best maybe it will happen and  then you’ll be that much further ahead  because you’re planning for worst case  scenario if you are needing more  assistance and financial relief with  your student loans, be sure to check out  our free resources all about student  loan debt and how you can advocate for  yourself at  thecollegeinvestor.com and we’ll catch  you in the next one.

How Democrates and republicans feel?

it’s a  house divided some democrats really want  to see another extension some want just  a blanket student loan cancellation for  everybody and then there are others who  are just not into it at all in fact  representative virginia foxx of north  carolina said that ”president biden’s  latest extension is a troubling trend  toward blanket student loan forgiveness”  which would be a massive mistake with  major consequences for borrowers and  taxpayers.

How many PSLF viewer are in Student Loan pause?

There’s  also a limited public service loan  forgiveness waiver that’s extended  through october 31st of 2022 and because  this modification was allowed because we  have a national emergency. It may  indicate that the biden administration  will also push and extend this waiver  one more time for everybody with federal  student loans until october 31st of 2022. But this really is all up to president  biden and whether or not he will  continue this for a sixth time.

Will The Student Loan Pause Payment Be Extended Again?