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President Joe Biden extended student loan relief until January 31, 2022, and here’s what it really means for your student loans.

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Here’s what you need to know.

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Based on Biden’s executive action, your federal student loans aren’t due again until as early as February 1, 2022. Given this latest update on student loans, make sure you understand the following:

Student loan relief will definitively end in January

The Biden administration stated clearly in its announcement to extend student loan relief that January 31, 2022 will be the official end. This means that you must prepare for the end of student loan forbearance and the beginning of student loan repayment. Don’t expect another extension of student loan relief because this is last call. This final extension is despite the future of the Covid-19 pandemic. This is despite the future of the economy. This is despite any future hardship. Get your financial house in order today because student loan relief has a definitive end date.

Student loans may be fixed by February

There have been multiple proposals to improve student loans from Democrats and Republicans. Between now and February, the U.S. Department of Education will work to improve student loans, including student loan repayment, student loan forgiveness and student loan cancellation. This may include simplifying student loan repayment, ensuring more student loan borrowers qualify for the Public Service Loan Forgiveness program, and proceeding with targeted student loan cancellation. The Education Department also may increase standards and oversight of student loan servicers to ensure that student loan borrowers get a fair shake. While the Education Department may not solve every problem related to student loans, the Education Department has six months to make some headway to increase transparency, reduce bureaucracy and help student loan borrowers navigate a complex student loan system.

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Student loan borrowers will get $110 billion of student loan cancellation

Here’s a shocking statistic: Through January 31, 2022, student loan borrowers will have received more than $110 billion in student loan cancellation. That’s not a typo. The Education Department says that since March 2020, student loan borrowers have been getting $5 billion a month in savings as a result of student loan relief due to the Covid-19 pandemic. With no mandatory federal student loan payments and temporary 0% interest rates on federal student loans, student loan borrowers have saved $110 billion. While the student loan cancellation derives from interest and not a reduction of principal student loan balance, it’s still wide-scale student loan cancellation. The amount may be smaller than the up to $50,000 of student loan cancellation for which Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) have lobbied. However, student loan borrowers will have enjoyed 22 months of no new interest or any federal student loan payments. Plus, all their non-payments have counted for purposes of the Public Service Loan Forgiveness program and student loan forgiveness related to income-driven repayment plans.

Private student debt won’t get the same student loan relief

At the beginning of the Covid-19 pandemic, several states helped student loan borrowers get some student loan relief for their private loans. Similarly, some lenders helped increase student loan relief for their student loan borrowers. However, the federal government has focused its student loan relief on federal student loan borrowers only. Why? The federal government owns 92% of all outstanding student loans, so Congress has focused here. In contrast, private loans are owned by lenders, financial institutions, investors and other third parties. Therefore, in contrast to federal student loans, it’s more complex to negotiate student loan relief for private student debt with each of these parties, and will continue to be. As a result, private student debt has been largely excluded from federal student loan relief. Sen. Bernie Sanders (I-VT) has proposed to cancel all private and federal student loans, although his proposal hasn’t gained traction in Congress. For student loan borrowers with private student debt who have struggled financially during the Covid-19 pandemic, options have been limited. These student loan borrowers either sought a deferment from their student loan servicer or turned to bankruptcy as a final effort to discharge their student loans.

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Don’t expect student loan cancellation

Many student loan borrowers now assume that student loan cancellation is happening soon. Why? Well, they believe that this extension of student loan relief is a precursor to the wide-scale student loan forgiveness. For example, student loan cancellation became the focus on Capitol Hill last week. Progressives in Congress will continue to pressure Biden to cancel student loans. Since becoming president, Biden has cancelled $3 billion of student loan debt. This includes $1.5 billion of student loans, which he has cancelled this way. Perhaps Biden enacts wide-scale student loan cancellation next. However, there is no indication that extending student loan relief is related in any way to wide-scale student loan cancellation. For example, Biden could have extended student loan relief to appease progressives and to provide enough time for 10 million student loan borrowers to get a new student loan servicer following the anticipated departure of two major student loan servicers. Therefore, targeted student loan cancellation, such as through the borrower defense to repayment rule, will continue to happen. Wide-scale student loan cancellation could happen, but don’t expect that it’s guaranteed with a “flick of a pen.”

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A lot can happen with your student loans between now and February. Reduce your uncertainty by taking control of your student loans. Here are some popular options to save money with student loan repayment:

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Zack Friedman is the bestselling author of the blockbuster book, THE LEMONADE LIFE. Apple named The Lemonade Life one of “Fall”s Biggest Audiobooks” and a “Must-Listen.” The Lemonade Life debuted as the #1 new business book on the Apple bestseller chart. Zack is the Founder & CEO of Make Lemonade (, a leading online personal finance company that empowers you to live a better financial life. He is an in-demand speaker and has inspired millions through his powerful insights, including more than 200 million people who have read his advice. Previously, he was a chief financial officer, a hedge fund investor, and worked at Blackstone, Morgan Stanley, and the White House. Zack holds degrees from Harvard, Wharton, Columbia, and Johns Hopkins.

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