You have student loans that you could have deferred them over the last year. But, you have been making payments to pay them down. You hear that the government may forgive student loan debt up to $50,000.
Should you pay – or should you not? That is the million-dollar question.
Let’s look at the issue. If the government comes in and offers to pay down student loan debt, will it pay you back for any payments made? Or is it the outstanding balances on the student loans? How much will be given to pay down? Will it be lump sum or paid over time?
Currently, federally backed student loans are deferred until September 1, 2021. President Joe Biden and Senate Majority Leader Chuck Schumer have indicated the government could forgive up to $50,000. Is there a chance that nothing is done? Yes. But politically, President Biden has indicated something could be done so to do nothing would be very damaging politically. They have already backed themselves into a corner by indicating that student loan debt could be forgiven.
You cannot walk that back now.
But there is the problem on the other side. Who would qualify and for how much? What are the criteria? Are those making much higher wages going to qualify? It is almost a certainty that anyone left out will file a lawsuit. Then it ends up in the courts – and that could take years.
President Biden could very well be walking into a legal minefield. That is why there is the BIG challenge to determine what can be done. Saying to do something is much easier than actually doing it.
What to Do
From all the comments, there is massive confusion what to do. It is always best to continue making payments because it is your obligation. Waiting for what could happen, which very well may not happen, is not sound financial advice. It is always best to pay down debt when you can. Don’t leave it for politicians to determine that. Besides, when have politicians been reliable?
That’s is true!