NEW YORK, June 11, 2021 (Newswire.com) - President Joe Biden's election campaign included ambitious plans to help decrease America's staggering student debt amounts and provide relief for borrowers. But today, many are still left asking "will Biden forgive student loans?"
In this article, we'll cover what Biden originally promised, what's happening now, and ways you can start paying off your student loans yourself.
What did Biden originally promise?
Biden's plans included:
- Forgiving $10,000 in federal student loan debt per borrower
- Forgiving all debt for borrowers attending either public college or nonprofit colleges serving minorities
- Making public colleges free for students in households earning under $125,000/year
- Expanding the Public Service Loan Forgiveness program and Pell Grants
What's happening now?
Biden extended the student loan payment pause through September of this 2021. However, nothing else related to student loans has happened since. There is some pending legal interpretation that will establish whether Biden can use his executive authority to eliminate student debt or ask Congress to pass a bill. So, in short, it's a student loan waiting game to see whether any of his proposals will become law.
How to DIY your student loans
Since we have no idea when student debt amounts might be forgiven, it might be a good idea to start going it alone debt-wise. Here are few ways you can get started today.
1. Calculate your total debt: The first thing you'll need to do is calculate how much you owe. This way, you can see how long you have to pay your debt off and how much you'll need to set aside monthly.
2. Create a budget: Next, create a realistic budget that will allow you to pay for your necessities and get started on student loan repayment. To create a budget, compare your monthly income (post-tax) against your monthly expenditures. If you're spending more than you're making, it's time to be strict and cut out discretionary expenses (like subscriptions you don't use).
3. Pick a repayment strategy: A debt repayment strategy can give you a blueprint for becoming debt-free. Two popular options are the debt snowball and debt avalanche methods.
Debt snowball method:
With the debt snowball method, you'll continue to pay minimum amounts on all your debt, but you'll put extra toward the debt with the smallest amount. Once that's paid off, you'll focus on paying off the next smallest debt amount. The debt snowball method is great for people who need to feel motivated to pay off their debt.
Debt avalanche method:
With the debt avalanche method, you'll still pay minimum amounts on your debt but you'll put extra toward the debt with the highest interest rate. Once that's paid off, you'll pay off the debt with the second-highest interest rate. The debt avalanche method can help you save more money overall.
4. Put extra $$$ toward your loans: Whether it's getting a side hustle or receiving some birthday cash, you'll want to put extra money toward your loans. And don't forget to tell your loan servicer that you want to apply overpayments to your current balance. If you don't, they may apply that money to the following month.
Biden may end up coming through on his student debt promises. But you should probably get a head start while we wait. You know what they say: If you want something done right, do it yourself.