September 6, 2021

Student loan payments get pushed back again, for the 5th time. Will this debt ever be forgiven?

You may be asking yourself why the government continues to push back repayment for student loans, what are the implications, and what happened to the whole forgiveness thing. Here's everything you need to know

10 min read

Qoins Staff

@qoinsapp

Student debt has been at the forefront of the financial implications of the coronavirus. Since the onset of the pandemic in 2020, student loan payments have been delayed a record 5 times! You may be asking yourself, why do they keep pushing these payments back? And will student loans ever be forgiven? Some experts say that although the delayed repayment due to the pandemic creates some much-needed comfort for those in financial hardship as a result of the pandemic, but the only solution according to experts is to forgive the debt as promised by the administration. Biden has firmly said he’d forgive student loans during his time in office, but no actions have been taken. Figures for forgiveness began as high as $50,000 of forgiven debt per borrower but now the target forgiveness is about $10,000 per borrower. 


In the mix of all of the talks about housing prices exploding, inflation, and money printing a major problem that contributes to the student debt crisis is simply the cost of higher education. The average college student graduates with over $30,000 in student loans. But many are not as lucky, some private institutions charge north of $65,000 per year to attend their universities. While these costs are high, they keep climbing with the tuition rising 1-2k per year… for the exact same services. Will we see some universities charging $100,000 per year within the next 15 years? Probably. A number of student borrowers are asking is now the perfect time to refinance with rates so low? We'll get more into that later.


To go back to the inceptions of the pandemic in March 2020, the U.S. Department of Education announced the ability for all student borrowers (with federal loans) to essentially press pause on their payments and allow their debt to ride interest-free. Nearly all borrowers accepted, but few are getting ahead of this debt by paying it off while it’s accumulating zero interest. This relief was supposed to last just 6 months initially, but now nearly 2 years later, and 5 extensions filed the pause is still 100% in effect. The current break of the pause is set to end in May, but no one knows if this will hold since the previous extension was announced just 30 days before payments were set to resume. 

“We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,” Biden said in a statement Dec. 22.

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But the simple fact that so many student loan borrowers plead that they’re still not ready or able to start paying off their loans is a strong signal to the Biden administration that much stronger action is needed. Extensions are delaying the problem, forgiveness could be the solution. Before the onset of the pandemic, the outstanding student loan debt surpassed $1.7 trillion with a T! This debt outpaced total credit card debt and auto loan debt. The average monthly bill was north of $400 which can seem incredibly daunting for someone in their first few years in the workforce or even those beginning families. Student loans simply stick around, and no matter how much you pay they consistently take significant chunks out of your paycheck. Didn’t we all wish we knew these would stick around for 2 decades when we were filling out those e-signature forms? Would we have changed universities, would we have done public instead of private? The debate can be endless. 

The talks of forgiveness continue with urges to Biden to act now, and that student loan forgiveness is something that’s strategically smart and morally urgent for American borrowers. The debate continues to become complex with opposing parties urging that degree holders are able to earn more which means they can afford the debt. But remember even if there is a miracle and student loans are forgiven, you will only see $10,000 taken away from your outstanding debt. That certainly helps, but if you have $30,000 which is the nation's average then you will still have to prioritize repayment as a strategy for the end of 2022. Qoins is here to help, use tools like roundups, when I get paid, or weekly withdrawals to pay off that student debt before it earns interest… even if you strategically pay off enough to hover right around the remaining $10,000 to be forgiven. Don’t wait on the government, take action now with Qoins!

And if you have been considering refinancing those student loans to save BIG on interest, check out our partners at Purefy that help you compare rates to get the best deal in town!

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