Student-loan payments will be paused in two months because of the swine flu. Thanks to President Joe Biden's targeted loan forgiveness, about 580,000 borrowers will be free of that burden forever.
The director of Federal Student Aid said this week that January 31, 2022, will be the last day borrowers will experience relief.
The stakes are very high as we face this challenge.
Transitioning 43 million borrowers back into repayment along with 16 million borrowers who will make payments to new lenders is an unprecedented task. The department will continue to work to ensure that all of the borrowers can return to repayment on their loans.
Student loan payments have been paused since March 2020.
The student-loan moratorium has been extended twice by President Joe Biden. The Education Department made it clear in August that there would be no more extensions past February, meaning borrowers will have to face their student-debt loads next year.
43 million Americans will be able to pay off their student debt in a smooth manner, according to Biden's administration. Some borrowers, experts, and lawmakers are not sure.
Some federal student-loan borrowers are better off.
Since taking office, Biden has extended the student-loan payment pause and canceled student debt for 600,000 borrowers.
In March, the Education Department took action for borrowers who were defrauded by for-profit schools, and to date it has canceled over $2 billion in student debt for borrowers who went to fraudulent, for-profit institutions.
Over $7 billion in relief has been given to borrowers with disabilities. Many borrowers who would have been eligible for loan-forgiveness under President Barack Obama were left out because they had to submit burdensome paperwork to qualify. Biden's Education Secretary canceled student debt for nearly 400,000 borrowers.
The Public Service Loan Forgiveness (PSLF) program, which forgives student debt for public servants, like teachers, after ten years of qualified payments, was recently announced by the department. The program ran up a 98% denial rate before the reforms, and the department said the changes should bring 550,000 borrowers closer to relief.
While those cancellation measures fulfill his campaign promise of reform, Biden has yet to approve $10,000 in student-loan cancellation for every borrower, something he has yet to do.
The majority of borrowers could be in financial trouble.
Some borrowers got a debt-free future, but the majority of those with federal loans can't. A recent survey from the Student Debt Crisis Center found that 89% of borrowers with full-time jobs don't feel financially-secure enough to resume payments next year, given the large chunk of their incomes that will go toward their student debt.
The Student Debt Crisis Center Executive Director told Insider that it's a recipe for financial disaster if people go to student loans at a time when the nation is talking about rising inflation and increased costs.
People feel the same. Clark, a single father with $550,000 in student loans for his kids, told Insider he doesn't feel confident about paying them off.
Clark said that he was worried about his ability to pay back the loans during his remaining working years, and that it would scare him even more when he retired. "That's the part that scares me the most."
Lawmakers like Massachusetts Elizabeth Warren believe in broad student-debt cancellation to combat those fears.
She previously said that cancelling $50,000 of student debt would relieve the student debt burden for most borrowers.
Do you have a story about student debt? You can reach out to her at asheffey@insider.com.
