Biden Administration Delays Decision on Debt Forgiveness, RISLA Has Lower Interest Rate Options

Biden Administration Delays Decision on Debt Forgiveness, RISLA Has Lower Interest Rate Options

The repayment of college loan debt is expected to continue to be in flux for months more according to new reports out of Washington. But, there is some significant help in Rhode Island for many families.

The Wall Street Journal reported Monday that President Joe Biden is likely to decide later this summer whether to partially forgive student-loan debt for millions of borrowers, according to administration officials and others familiar with the matter, after the president said more than a month ago that he would weigh in on the issue in the next couple of weeks.

“The officials said Mr. Biden is likely to announce his plans in July or August, closer to when the pandemic-related pause in federal student loan payments is scheduled to lapse, as the president and his senior advisers continue to weigh the political and economic fallout of any such move. The Biden administration earlier this year extended the pause, which has been in effect since March 2020, until Sept. 1,” according to the WSJ.

Closer to home in Rhode Island, Charles Kelley, the executive director of the Rhode Island Student Loan Authority (RISLA) tells GoLocal that the organization has significant relief for parents who have to pay back the federal plus loan.

Kelley says that with the new interest rate increasing dramatically for federal parent PLUS loans, the new rates are jumping up substantially.

“We just did a $100 million bond issue and that's how we fund our student loans and we're hoping...if someone repays their loans over a 10-year period -- the standard time period -- to be just under 5%," he said. 

Parent PLUS Loans and Grad PLUS Loans (PLUS Loans) is jumping to a new rate of 7.54% -- up from 6.28%, according to Forbes. 

Kelley encourages families to "shop around" to make sure they can realize the best rate.

The delays by the Biden administration means the roughly 40 million people who owe about $1.6 trillion in federal student debt may have to wait to find out whether they may see all or part of their loans erased.

FOR MORE INFORMATION FROM RISLA - CHECK HERE