Connect with us

Business

Biden has extended the long student loan freeze — but what’s up with debt forgiveness?

Published

on

Biden has extended the long student loan freeze — but what’s up with debt forgiveness?

Americans who were worried about the return of federal student loan payments got a big gift from President Joe Biden just before Christmas.

He announced that the pandemic’s long student loan freeze for roughly 42 million borrowers would be extended yet again, this time through May 1, 2022. Loan payments, interest and collections would remain on hold until then. They had been scheduled to resume in February.

“We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,” Biden said in a statement.

The president’s campaign pledge to forgive thousands in student debt for every borrower remains a big question. So for now, it’s smart to use the new reprieve to clear out as much of that debt as you can. Here are three ways to do it.

1. Make payments, even though you don’t have to

Young indian businessman holding phone reading bank receipt calculating taxes, ethnic man using smartphone mobile application checking bill document, managing money finances, loan expenses.

insta_photos / Shutterstock

While it might be tempting to remain “on break” from your student loans until May, continuing your regular payments — and even paying more than your usual minimum — is a wise move, if you can afford it.

“The pause on student loan payments will help 41 million borrowers save $5 billion per month,” says Biden’s Education Department, referring to the savings from the current 0% interest on federal student loans.

Any payments you make now will go entirely toward the principal of your loan and help knock down your balance. When student loan debt was first frozen in March of last year, the typical balance was $20,000 to $24,999, according to Federal Reserve data.

Resuming your payments early is probably out of the question if you’re dealing with other debts, like if you ran up your credit cards during a period of unemployment last year. You could use the next few months to tame those debts with the help of a lower-interest debt consolidation loan.

2. Seek a new repayment plan

Woman renter holding paper bills using calculator to determine affordable student loan payment.

fizkes / Shutterstock

You could clear your student loan debt faster by switching up your current payment plan, particularly if the pandemic cut your income and it still hasn’t come back.

“We will continue to provide tools and supports to borrowers so they can enter into the repayment plan that is responsive to their financial situation, such as an income-driven repayment plan,” says Education Secretary Miguel Cardona, in a news release.

Income-driven plans allow borrowers to make more affordable payments, based on what they earn. After 20 or 25 years of regular payments under an income-driven plan, your remaining debt will be forgiven.

That might be your best shot at having some student debt canceled. President Biden campaigned on wiping out $10,000 in debt per borrower, and leading Democrats keep pressing him to go to $50,000 — but the president has been waiting for legal reviews of his ability to cancel debt on his own, without Congress.

3. Refinance private loans

Man on laptop

Vadym Pastukh / Shutterstock

If your student loans are from a private lender and not the federal government, the longer payments pause doesn’t apply to you. But you could attack your student debt over the next few months by refinancing your loans, because interest rates on refi student loans from private lenders have been at historically low levels.

Whether you qualify for refinancing will largely depend on your credit score and your current income. If you’re not sure about your score, it’s easy now to check your credit score for free online.

Even if you’ve lost your job due to the pandemic, you may be eligible for a refi if you can show investment income or earnings from a side gig, or find a co-signer to back your application. To get the best rate to refinance a student loan, you’ll need to shop around and compare quotes from multiple lenders.

Just remember that refinancing is not an option if you’ve got a federal student loan, and replacing a federal loan with a private one will make you ineligible for any further loan relief from the government.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Business

Teladoc Tumbled 38% After Big First-Quarter Loss. Is It Just a Pandemic Play?

Published

on

Text size

Source link

Continue Reading

Business

After pandemic drop, Canada’s detention of immigrants rises again By Reuters

Published

on


© Reuters. FILE PHOTO: Two closed Canadian border checkpoints are seen after it was announced that the border would close to “non-essential traffic” to combat the spread of novel coronavirus disease (COVID-19) at the U.S.-Canada border crossing at the Thousand Isla

By Anna Mehler Paperny

TORONTO (Reuters) – Canada is locking up more people in immigration detention without charge after the numbers fell during the pandemic, government data obtained by Reuters shows.

Authorities cite an overall rise in foreign travelers amid easing restrictions but lawyers say their detained clients came to Canada years ago.

Canada held 206 people in immigration detention as of March 1, 2022 – a 28% increase compared with March 1 of the previous year. Immigration detainees have not been charged with crimes in Canada and 68% of detainees as of March 1 were locked up because Canada Border Services Agency (CBSA) fears they are “unlikely to appear” at an immigration hearing, according to the data.

The rise puts Canada at odds with Amnesty International and other human rights groups that have urged Ottawa to end its use of indefinite immigration detention, noting CBSA has used factors such as a person’s mental illness as reason to detain them.

A CBSA spokesperson told Reuters that “when the number of entries (to Canada) goes up, an increase in detention is to be expected.” CBSA has said in the past it uses detention as a last resort.

A lawyer told Reuters her detained clients have been in Canada for years.

In the United Kingdom, too, immigration detention levels rose last year after dropping earlier in the pandemic, according to government statistics. Unlike Canada, the United States and Australia, European Union member states have limits on immigration detention and those limits cannot exceed six months.

The rise in detentions puts people at risk of contracting COVID-19 in harsh congregate settings, refugee lawyers say.

Julia Sande, Human Rights Law and Policy Campaigner with Amnesty, called the increase in detentions “disappointing but not surprising,” although she was reluctant to draw conclusions from limited data.

The number of immigration detainees in Canada dropped early in the pandemic, from a daily average of 301 in the fourth quarter (January through March) of 2019-20 to 126 in the first quarter (April through June) of 2020-21.

FEW NO-SHOWS AS DETENTIONS DROPPED

Detaining fewer people did not result in a significant increase in no-shows at immigration hearings – the most common reason for detention, according to Immigration and Refugee Board data.

The average number of no-shows as a percentage of admissibility hearings was about 5.5% in 2021, according to that data, compared to about 5.9% in 2019.

No-shows rose as high as 16% in October 2020, but a spokesperson for the Immigration and Refugee Board said this was due to people not receiving notifications when their hearings resumed after a pause in the pandemic.

Refugee lawyer Andrew Brouwer said the decline in detention earlier in the pandemic shows Canada does not need to lock up as many non-citizens.

“We didn’t see a bunch of no-shows. We didn’t see the sky fall … It for sure shows that the system can operate without throwing people in jail,” Brouwer said.

He added that detainees face harsh pandemic conditions in provincial jails – including extended lockdowns, sometimes with three people in a cell for 23 hours a day.

Refugee lawyer Swathi Sekhar said CBSA officials and the Immigration and Refugee Board members reviewing detentions took the risk of COVID-19 into account when deciding whether someone should be detained earlier in the pandemic but are doing so less now.

“Their position is that COVID is not a factor that should weigh in favor of release,” she said.

“We also see very, very perverse findings … [decision-makers] outright saying that individuals are going to be safer in jail.”

The Immigration and Refugee Board did not immediately respond to a Reuters request for comment.

Source link

Continue Reading

Business

Nasdaq futures rise as market attempts comeback from April sell-off, Meta shares soar

Published

on

Stock futures rose in overnight trading as the market shook off the April sell-off and investors reacted positively to earnings from Meta Platforms.

Futures on the Dow Jones Industrial Average added 70 points or 0.2%. S&P 500 futures gained 0.7% and Nasdaq 100 futures jumped 1.2%.

The moves came as shares of Meta surged more than 18% after hours following a beat on earnings but a miss on revenue, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.

Meanwhile, shares of Qualcomm gained 5.6% in extended trading on the back of strong earnings while PayPal rose 5% despite issuing weak guidance for the second quarter.

“I think a lot of people want to believe that earnings are going to pull us out of this, but earnings are not what got us into this,” SoFi’s Liz Young told CNBC’s “Closing Bell: Overtime” on Wednesday. “… But the reality is there are so many macro headwinds still in front of us in the next 60 days that the market is just hard to impress.”

The after-hour activity followed a volatile regular trading session that saw the Nasdaq Composite stoop to its lowest level in 2022, as stocks looked to bounce back from a tech-led April sell-off. The index is down more than 12% since the start of April.

In Wednesday’s regular trading, the tech-heavy Nasdaq ended at 12,488.93, after rising to 1.7% at session highs. The Dow Jones Industrial Average rose 61.75 points, or 0.2%, to 33,301.93 propped up by gains from Visa and Microsoft, while the S&P 500 added 0.2% to 4,183.96.

Investors await big tech earnings on Thursday from Apple, Amazon and Twitter, along with results from Robinhood. Jobless claims are also due out Thursday.

Source link

Continue Reading

Trending