CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Will 2021 Bring Student Loan Forgiveness and Will It Mean a Decrease in Student Loan Debt-Related Bankruptcies?

COVID Student Loan Relief In 2021.

Student Loan Debt

Are you one of the millions of Americans who struggle to make ends meet every month due in part to massive student loan debt? Help could be on the way.

Many federal student loan borrowers were allowed to pause their payments in 2020 due to the COVID-19 pandemic. Experts expect the pause to last through at least January 2021. But a temporary pause might not be the only relief on tap in 2021.

Originally, the US Department of Education extended it through the end of January. This was in addition to the previous extension by the presidential administration. It’s expected that the new administration will further extend it, but it’s uncertain for how long.

Keep in mind, when the extension expires, individual borrowers have the option of requesting personal forbearance or deferment. If you aren’t sure about your financial situation, you can contact your loan service provider to discuss your options. You might also be able to adjust your payments based on your income. If you do this, you’ll pay less per month for up to 25 years and the remaining amount will be forgiven.

Will What I Owe Be Canceled?

Nothing is for certain at this point. However, there’s talk of the new administration canceling a significant amount of student loan debt by executive order. Lawmakers have pressured the president-elect to take action on up to $50,000 in debt per borrower. This is significantly more than then-candidate Joe Biden called for in March 2020 when he tweeted his support for $10,000 in loan forgiveness in a COVID-relief package. The House of Representatives passed similar relief in its HEROES Act in May. Unfortunately, though, the loan forgiveness plan ultimately did not pan out.

It’s expected that the proposed $2000 COVID-relief stimulus will take priority over student loan relief in the New Year. However, that doesn’t mean loan forgiveness is off the table.

What Are My Options If My Student Loan is a Problem?

As everyone awaits what the new administration will do regarding student loans, you have options for relief if you are struggling.

The CARES Act allows employers to give workers more than $5000 a year in tax-free student loan repayment (and tuition assistance). This means your employer could pay a significant part or all of your student loan payment each month without it increasing your taxable income. The Consolidated Appropriations Act passed in December 2020 extended this benefit through 2025.

Financial experts are expecting the passing of the simplification of the student loan repayment process proposed by then-candidate Biden during the campaign. His plan automatically sets payments and interest rates to zero for anyone earning less than $25,000 per year. The plan also included changes to the eligibility rules for income-driven payments and a streamlining of the Public Service Loan Forgiveness Program. Republicans and Democrats support the simplification of the existing repayment plan process, so it’s expected that change will come, even if it is not the exact plan proposed during the campaign.

The future looks bright for those struggling with student loan payments. Still, there is a great deal of uncertainty. If you’re immediate financial challenges due to unaffordable student loan payments, waiting might not be an option. There’s a chance filing for bankruptcy could help you get your situation under control. Most student loan debt is non-dischargeable in bankruptcy. However, filing can dramatically alter your financial situation and allow you to re-prioritize your debt obligations.

For more information or to discuss your financial situation, contact the Law Office of Robert M. Geller at 813-254-5696 to schedule a free consultation.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

Can Leading a Frugal Lifestyle Prevent a Second Bankruptcy?

Changing your approach to spending is a necessity after bankruptcy. You’ll turn over some control of your finances to the...
Read More

Are Medical Issues Forcing You Into Bankruptcy?

Many Americans wind up in debt because of medical bills. One of the most common reasons for filing bankruptcy in...
Read More

Law Offices of Robert M. Geller, P.A. Congratulates Danielle Austin For Receiving the Patriot Award from the United States Department of Defense

Award Recognizes Support of Guard and Reserve Members Who Work for the Organization Tampa, Florida, June 29, 2021 – The...
Read More

Is Your 401k or Other Retirement Savings at Risk in Bankruptcy’s Liquidation of Assets?

If you’ve spent years saving for retirement, putting that money at risk when you file for bankruptcy is likely one...
Read More

Tips to Help You Protect Your Assets When You File for Bankruptcy

One of the most intimidating aspects of filing for bankruptcy is protecting your assets. Worrying about whether bankruptcy puts their...
Read More

How Does Bankruptcy Affect Vehicle Ownership? What Assets Can You Keep through the Bankruptcy Process and Does It Affect Your Car?

Many people struggling financially avoid filing for bankruptcy because of concerns about losing important assets like their vehicles. The good...
Read More

Is There a Legal Way to Hide Assets When You File for Bankruptcy?

Filing for bankruptcy can be an overwhelming experience. The relief you receive when you file helps you feel better about...
Read More

Do Bankruptcy Trustees Take Your Savings? What is Considered an Asset in Bankruptcy and How Does It Affect the Money You’ve Saved?

Bankruptcy trustees gain access to a variety of your assets when you file. But what is considered an asset in...
Read More

Can Filing for Bankruptcy Help You Protect Your House?

fiHow filing for bankruptcy affects your home is one of the greatest concerns people have when they consult with bankruptcy...
Read More

Should I Refinance a Student Loan I Can’t Discharge in Bankruptcy?

Student loan debt is overwhelming many people. Could refinancing be the answer to help you avoid bankruptcy if your student...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo RG Seal

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions