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Making Sense of the Latest Student Loan Relief Extension

The Latest Student Loan Relief Extensions

President Biden has extended student loan relief until January 31, 2022. This means payments for federal student loans won’t be due until as early as February 1, 2022.

With growing concerns over student loan debt, the government has taken the following steps to address this issue:

  1. The Setting Every Community Up for Retirement Enhancement (SECURE) Act, which allows 529 plan withdrawals of up to $10,000 annually to pay down student loans.
  2. The Coronavirus Aid, Relief and Economic Security (CARES) Act, which paused federal student loan payments through Sept. 30, 2021, and temporarily set the federal student loan interest rate to 0%. It allowed employers to contribute up to $5,250 in tax-exempt student loan repayment through Dec. 31, 2020.
  3. The Consolidated Appropriations Act, 2021 (CAA), which extended the CARES Act provisions to allow employers to make tax-exempt loan-repayment contributions of up to $5,250 through 2025. Employers and loan holders are strongly advocating that Congress make these contributions a permanent benefit.

Learn more about the latest on the student loan relief extension.

Source:
Forbes