“Large” student loan cancellation still on the table, says Education Secretary Miguel Cardona
More than half a million student loan borrowers have qualified for some form of student loan waiver since President Joe Biden took office. But so far, the White House has failed to push ahead with the widespread student debt cancellation promised by the president during the election campaign.
However, the Biden administration is still discussing the âbroadâ cancellation of student loans, Education Secretary Miguel Cardona told CNBC at a town hall on Wednesday.
“We’re going to continue the conversations about loan forgiveness – a general loan forgiveness.”
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“Our conversations are ongoing with the Justice Department and the White House on these issues,” Cardona continued, referring to the widespread cancellation of student loans.
With increasing pressure from leading Democratic lawmakers like Senate Majority Leader Chuck Schumer, as well as the progressive voters who put Biden in power, the issue of federal student loan debt cancellation remains a priority at Home. White.
It’s still unclear whether the Education Department will write off the debt via an executive order from Biden, or whether college graduates will have to rely on Democrats and Republicans in Congress to come together to enact student loan forgiveness legislation.
Even if a blanket cancellation of student loans is put in place by the Ministry of Education, it will not benefit all borrowers. Those with higher incomes are unlikely to qualify, and private student loans will not be canceled.
Read on to find out what you can do if you don’t qualify for a student loan discharge, including refinancing a student loan. If you decide to refinance, visit Credible to compare the interest rates of several private lenders to make sure you get the best possible rate for your situation.
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What to do if you don’t qualify for your student loan waiver
The Biden administration has so far written off $ 9.5 billion in student loan debt, but only a fraction of borrowers have been able to benefit from a forgiveness. Here are some ways to manage your college debt if you don’t qualify for student assistance programs, like loan forgiveness.
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Refinance your student loans for better terms
Refinancing a private student loan involves taking out a new loan to pay off your current student debt. By refinancing at a lower rate, you may be able to save money on your monthly payments, get out of debt faster, and save money on interest over time.
According to data from Credible, student loan rates are nearing all-time lows, making it a good time to get a better rate on your college debt. However, refinancing your federal student loans into a private loan makes you ineligible for federal benefits such as income-based repayment plans, COVID-19 deferral, and debt cancellation programs such as loan forgiveness. for the public service (PSLF).
But since private loans probably couldn’t be canceled anyway, you have nothing to lose by refinancing your private student debt at a lower rate.
Compare the student loan rates in the table below and visit Credible to see your estimated rate without affecting your credit score.
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Join an income-based repayment plan
According to a recent survey, many federal student loan borrowers feel ill-prepared to resume monthly payments when the administrative forbearance period ends early next year. If you want to reduce your federal student loan payment, consider signing up for an income-based repayment plan (IDR plan).
IDR plans limit your monthly loan payment amount to 10-20% of your gross monthly income, depending on the type of federal loans you have. You can register for free by logging into your account on the Federal Student Aid website.
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Make additional payments on your student loans
There is a simple rule of thumb for borrowing money: the faster you pay off your loans, the more money you will save in interest over time. This same strategy applies to student loan debt.
If you can afford to make additional payments on your student loans, whether you have federal direct loans or private loans, you have the potential to save thousands of dollars over your debt repayment. Use a student loan payment calculator to see how much you can save on interest by making additional payments.
Also, be sure to contact a knowledgeable loan officer at Credible to clear up any confusion about consolidating, repaying, or forgiving student loans.
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