By Rachel Puryear
Hello, here’s some excellent news just in time for the holidays!
Well, Sallie Mae may not have lost anyone’s accounts yet, but the Biden-Harris Administration will keep the dreaded student loan overlord away for a few more months.
After previously extending the pause on repayments, collection, and accrual of interest until February 1, 2022; the pause is now extended again for an additional 90 days, until May 1, 2022. This should help make a lot of Christmases/holiday seasons brighter and more flush with cash!
If you owe student loans, how will you take advantage of the extended pause? Will you soon spend it on a good time, perhaps buying more gifts? Will you save and invest it, replenishing an emergency savings and/or increasing wealth? Will you pay down other bills, buy things you’ve needed for a while, or perhaps get ahead on paying student loans while the interest is still paused? Will you help loved ones, or contribute more to charity? Will you feel more emboldened to start, or expand, a business of yours? Whatever you do, it’s your money, so use it however best suits you.
Advocates are still pressuring the Biden-Harris Administration to go even further and cancel all student debt; a move which would help an awful lot of struggling families, help narrow the racial wealth gap, help people better afford homes, and undoubtedly improve overall mental health across the nation – large amounts of unaffordable, non-dischargeable debt takes a huge, even if largely invisible, toll.
The Biden-Harris Administration has already cancelled a significant amount of student debt for certain classes of borrowers, but that does not include most people who still owe.
Although full cancellation would be ideal, many other options exist as lesser-but-still-helpful alternatives; including expanding tax deductions for interest and principal paid on student loans, partial loan balance cancellation, caps on loan interest, cancellation of accrued interest, automatic and tax-free discharge of student loans after a certain period of time along with shortening that timeline, automatic and tax-free student loan discharge for borrowers over a certain age (like 55, 60, 65) along with prohibitions against garnishing retirement and disability payments for student debt, tax-free discharge for borrowers who haven’t made an average of more than a certain percentage of their debt over several years (like not averaging income more than half their debt amount for ten years), and possibly more. There is a lot that could be done to help borrowers who very much need it.
Thank you, dear readers, for reading, following, and sharing. Here’s to slaying debt, and brighter holidays with more cash!
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