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Leading Democrats are again urging Biden to cancel student loans and extend the freeze on student loan payments. (iStock)
On Tuesday, a group of prominent Democrats again urged President Joe Biden to extend the freeze on federal student loan payments and to write off $ 50,000 in student debt per borrower through an executive order.
In a joint press conference, Senate Majority Leader Chuck Schumer, DN.Y., Senator Elizabeth Warren, D-Mass., And Rep. Ayanna Pressley, D-Mass., Urged Biden to use its executive authority to make these changes. Currently, federal student loan payments are expected to start again in October, but Pressley said the recent spike in COVID-19 Delta variant infections warrants pushing the date further.
“We urge President Biden to act urgently,” Pressley said at the press conference. “Failure to act would be unreasonable, undermine our economic recovery.”
Even if the Biden administration decides to take action, such action would not help private student loan borrowers, as they are not eligible for federal student loan forbearance related to COVID-19 and would not be either. no longer eligible for a discount. However, they still have options such as refinancing their student loans. Refinancing could help borrowers save on their monthly payments by getting a lower interest rate. Visit Credible to find your personalized rate.
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This isn’t the first time Democrats have called for an extension of the student loan repayment freeze. Previously, Democratic lawmakers sent a letter to Biden with the results of their surveys of student loan officers, showing that many were concerned about their ability to end student loan forbearance.
Now lawmakers are renewing that call.
“If payments resume on October 1, millions of students, borrowers and parents will be abruptly pushed back into repayment at the same time, even those who are living on a paycheck or without a paycheck at all,” said Schumer at the news conference. “It could slow our economic recovery and put millions of student loan borrowers on the edge of a financial cliff.”
If Biden extends the freeze on federal student loan payments or decides to cancel an amount of student loans, private student loan holders will not be eligible for these benefits. If you want to refinance your private student loans as an alternative, you should visit Credible to see what options are available to you.
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What to do if you have private student loans
Just because private student loans don’t qualify for the federal payment freeze or potential forgiveness programs doesn’t mean private borrowers are running out of options. Here are a few they can consider:
- Refinance your private student loan
- Talk to your lender about the deferral
- Switch to student loan forbearance
1. Refinance your private student loan: With interest rates at record highs, maybe now is the time to consider refinancing if you have private student loans. It might help borrowers save on their monthly payments and the amount they pay back over the life of the loan. Visit Credible to be prequalified in minutes without affecting your credit score.
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2. Talk to your lender about the deferral: If your situation prevents you from making your payments, most private lenders will work with borrowers on deferral options, allowing them to withhold student loan payments due to economic hardship or unemployment. This option allows borrowers to suspend their payments for a fixed period of time without accumulating interest. Borrowers should contact their service agent to see if this option is available.
3. Switch to student loan forbearance: If you do not qualify for the deferral or if your service agent does not offer it, some private lenders offer forbearance options. It also allows borrowers to put their payments on hold, but the remaining loan balance continues to accumulate interest while payments are pending.
While deferral and forbearance each require proof of financial hardship, anyone can apply for a student loan refinance and benefit from the potentially lower monthly payments. With interest rates at rock bottom, now may be the time to refinance your private student loans. You can get in touch with a student loan expert at Credible and get all your questions answered.
Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.
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