The new administration has said one of its top priority is dealing with student loan debt. Whether you are a current college student or dealing with student loans you took out years ago, we’ve been told that help is on the way.
COVID-19 has only increased the anxiety over dealing with existing student loan debt. Nearly one third of students reported that the pandemic has put extra financial stress on their families. The only category of American debt greater than outstanding student loan debt is mortgage debt. Student loan debt is even more than credit card debt.
Last spring, the CARES Act was passed and allowed borrowers to skip payments without interest. The amount skipped is being added to the end of the loan. That only served to extend the life of the loan. This expires December 31, 2020.
President-elect Biden has proposed different alternatives to deal with student debt. One alternative would extend the suspension of benefits until September 2021 and immediately forgive up to $10,000.00 of student loan debt.
Other alternatives being discussed are cancelling student debt altogether, or waiving the first $50,000.00 or student debt.
No matter which alternative is taken, the student loan debt issue will need to wait until the administration deals with the distribution of the COVID-19 vaccine.