Joseph R Biden Jr. is now the 46th President of the United States of America and is getting right to work.
On January 20th, President Biden signed an executive order
keeping federal loans at 0% interest through September 30th, 2021. With this, interest accrual and payment collections have ceased, continuing the pause that began in March of 2020.
There is also a lot of buzz surrounding the Biden administration working to cancel $10,000 dollars worth of federal loans for borrowers. There are a lot of questions that haven’t been answered about this plan, but as of right now, activists are calling on Washington to institute this relief as quickly as possible.
What does this mean for you exactly?
Federal Loan Holders:
If you have only federal loans, you could sit tight and not pay anything. But with your interest rate at 0%, this could be a great time to pay back only your principle if you have the financial means that enable you to do so, thus making a huge dent in your loan.
If you owe less than $10,000 in federal loans, you can wait it out and see what happens with cancellation. If you owe more than $10,000 in federal loans, you too can ride out the federal loan holiday and commence payments in October of 2021, but this really is a great opportunity to pay off your loan while not worrying about interest.
Private Loan Holders:
Unfortunately, the Biden Administration hasn’t said anything about private loans, which fall outside of the jurisdiction of the federal government. In this low-interest rate environment, you could look into refinancing and saving money on the loans you’re already paying.
Federal and Private Loan Holder:
The above applies to you on both fronts. This would be a really great time to get your loans organized, so start by using this checklist below if you’d like a fresh start at getting your loans in order:
- Do I have Private Loans | Yes ☐ No ☐
- Do I have Federal Loans | Yes ☐ No ☐
- Do I owe less than $10,000 in Federal Loans | Yes ☐ No ☐
- Do I know my Private Loan(s) interest rates | Yes ☐ No ☐
- Do I know my Federal Loan(s) interest rates | Yes ☐ No ☐
- Do I know where my Private Loan(s) are held | Yes ☐ No ☐
- Do I know where my Federal Loan(s) are held | Yes ☐ No ☐
A final note on DACA Students:
We put together this guide
to help DACA students with their financial aid journeys. Biden also signed an executive order
to help preserve and fortify DACA – the LA Times
reports that “Biden is calling on Congress to adopt legislation that gives DACA recipients permanent legal status and a path to citizenship.” We’ll keep our eyes peeled for news about DACA and anything student loan-related.
If you want more Federal Student Loan updates, be sure to check out our tracker
, which can send you short updates handwritten by our team, straight to your inbox!