Good news for student loan borrowers, President Biden has extended the pandemic pause on federal student loan interest and payments for borrowers until September 30, 2021. You might remember this first started with the CARES Act last, which I discussed here.
No reason to make this complicated:
- $0 Payments
- 0% Interest
- These months continue to qualify for both PSLF and IDR loan forgiveness programs.
While this is ultimately a small gesture in the context of the raging pandemic and the ongoing student loan crisis, this is an unequivocally nice thing for current borrowers. Attendings going for PSLF are probably the biggest beneficiaries nationwide.
If you’ve been wondering about the possibility of windfall loan forgiveness, most readers shouldn’t hold their breath. Biden has really only signaled an interest in waiving $10k, too small to make a dent for most doctors and one that is likely to be means-tested with a phase-out for higher earners. It’s possible that residents may still fall in the sweet spot there, but don’t expect to have your debt wiped away with the swish of a pen (ever).
For students graduating in 2021, you’ll still want to consolidate immediately. You should read the whole book (which is free), but the chapter on Direct Consolidation explains the rationale.