At the end of December, congressional leaders passed a long-awaited second coronavirus relief package which contained stimulus checks, but no additional student loan forbearance. The allocated $900 billion dollars will give money to unemployed Americans, struggling businesses, and schools. This would be the second largest relief package after the $2 trillion CARES Act, which passed in March 2020.

Because this relief package does not contain additional extensions on forbearance, the current pause on federal student loan payments (and interest) will end on January 31, 2021. However, this expiration date gives President-elect Joe Biden and his administration enough time to offer additional aid once he takes office in January.

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What’s in the bill for borrowers?

Without additional relief, student loan repayments will restart after January 31, 2021, meaning that no payments will be due and no interest will accrue until then. It’s important to note that this forbearance only applies to federal student loans.

According to US News & World Report, the national student loan debt reached $1.6 trillion in 2019. The Federal Reserve reported that in 2018, 2 in 10 borrowers who still owe money are behind on their payments. With the economic impacts of COVID-19, many borrowers are now desperate for additional relief.

While the relief bill did not extend forbearance, there are some important provisions that students and borrowers should note. Namely, the bill increases the Pell Grant to allow a maximum grant of $5,435 per student per year for the 2021-2022 school year. It also expands upon the CARES Act by offering a tax break for employers that help employees repay student loans up to $5,250 per year. The bill will extend this program until at least December 31st, 2025.

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What can we expect from the incoming administration?

For many borrowers, their hope for relief hinges on the incoming Biden administration. Biden has spoken of student loan forgiveness and even recommended giving borrowers $10,000 for coronavirus relief. However, he has not committed to cancelling student loans through an executive order despite calls from his advocates to do so.

Previously when asked about this issue, Biden indicated that he wants Congress to cancel student loans. “It’s arguable that the president may have the executive power to forgive up to $50,000 in student debt. Well, I think that’s pretty questionable. I’m unsure of that. I’d be unlikely to do that,” he said. While Biden supports loan forgiveness in principle, he believes that he cannot act unilaterally and cancel student loan debt. Thus he has maintained the position that Congress should cancel $10,000 of student loans for each borrower due to the pandemic.

But where did this debate over Biden’s role come from? Last September, Senators Elizabeth Warren and Chuck Schumer introduced a resolution for the president to cancel up to $50,000 of student loan debt for each borrower through an executive order. They stated that the Higher Education Act of 1965 gives the U.S. Secretary of Education the power to cancel student loans, which means the president could cancel student loan debt without Congress.

However, Biden still maintains that any student debt forgiveness needs to be done through Congress and not the executive branch. While there is no guarantee that Congress will pass additional loan forbearance in 2021, especially since student loan relief was left out of December’s stimulus package, this is an issue that will continue to unfold in the coming months.