Should You Stop Paying Your Student Loans in Forbearance?

The possibility of student loan forgiveness is on the horizon, so should you stop making payments on your own loans?

That depends, but let’s take a look at where things stand now:

• An administrative forbearance that freezes interest rates and payments for federally held student loans has been extended through Aug. 31, 2022.
• President Joe Biden, who campaigned on the promise to wipe out at least $10,000 in debt for student loan borrowers, faces continued pressure from some groups to wipe out student loans across the board.
• During Biden’s term, the Department of Education has canceled student loan balances for an estimated 700,000 borrowers in targeted groupsincluding some current and former service members, those with a permanent disability, borrowers whose school shut down and eligible participants in the Public Service Loan Forgiveness program.

So what does all this mean for you, the student loan borrower?

Depending on your loans and financial situation, you might actually be better off making larger payments right now… or none at all.

Don’t worry, we’ll explain.

Do I Qualify for Student Loan Forgiveness?

If you’re a typical borrower in a non-public sector job, it’s unlikely you’ll qualify for student loan forgiveness. It’s likelier for some job- and income-specific groups — but if you’re banking on all student loans getting permanently wiped out, expect to be disappointed.

During his campaign, then-candidate Biden announced that part of his Emergency Action Plan for the economic recovery would include forgiveness of at least $10,000 in student loans for borrowers, plus additional relief for those who attended public colleges or historically Black colleges and universities.

But much of that proposal has never come to pass, including the student loan cancellation.

Some groups have been pressuring the Biden administration to wipe out some or all of the $1.7 trillion outstanding student loan debt.And there are plenty of…