After months of silence and uncertainty, Biden delivered a windfall to student loan borrowers yesterday: four more months of student loan relief through January 31, 2022. This means that there will be no required federal student loan payments, 0% interest on federal student loans, and no collection of student loans in default. It’s a big win for progressives like Sen. Elizabeth Warren (D-MA) and Sen. Chuck Schumer (D-NY), who have advocated for months for the president to extend student loan relief for millions of student loan borrowers. They had hoped for an even longer extension of student loan relief — until at least March 31, 2022 at the earliest — but it appears they will settle on an extension into early next year. So, this begs the question: Is student loan cancellation coming next?
Student loans: the good news
There’s good news and bad news for student loan borrowers with respect to student loan relief. The good news is that they will have another four months of financial relief. This is especially helpful to any student loan borrowers who are struggling financially in the wake of the Covid-19 pandemic. This extra time period will also help more than 10 million student loan borrowers who will lose their federal student loan servicer before December 31 get assigned a new one. Two major student loan servicers, FedLoan Servicing and Granite State Management & Resources, announced last month they will end their federal student loan servicing contracts with the U.S. Department of Education by year end. Therefore, the U.S. Department of Education will now have more time to ensure a smooth transition for those student loan borrowers who are impacted.