Education Planning Q&A: Student Debt Relief, In-Person Classes

Baird Education Planning Consultant Jeannette Haen weighs in on what to expect for 2021.

Are there any updates on student debt relief from the Biden administration?

There are two major education financing initiatives currently being debated in the executive branch.

In March 2020, the Department of Education suspended student loan payments, stopped collections on defaulted loans and set a 0% interest rate for all department-owned federal student loans – measures later adopted in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. These actions were originally set to expire September 30, 2020, but have since been extended through September 30, 2021 – and now include relief for federal student loans made through the Federal Family Education Loan program that are in default. It’s unclear at this time if this deadline will again be pushed back.

In addition, the Department of Education and the Justice Department are currently reviewing whether the president has the authority to cancel up to $50,000 in student loan debt through executive action. If it is determined that he cannot, student debt relief would have to be authorized by Congress and then signed into law.

Key considerations: There currently is no timetable on when we will have guidance on either additional student loan relief or forgiveness through executive action. If you currently have student debt, we suggest taking a pragmatic approach and assume payments will resume on September 30, 2021. is a trustworthy source for future financial updates on these two initiatives.

What is the likelihood of Congress passing additional education finance legislation?

There are several student debt and tuition relief proposals currently being reviewed by Congress, including the Earn to Learn Act introduced in April by Senators Mitt Romney and Kyrsten Sinema. Under the Earn to Learn Act, eligible students would receive a matching contribution of $8 for every $1 the student or their family contributes to an educational savings account. It is modeled after Arizona’s existing Earn to Learn program, which has a first-year retention rate of nearly 90%. Additional proposals include the Educational Equity Challenge Grant Act of 2021, introduced by Senator Elizabeth Warren, and the Repay Act of 2021, introduced by Senator Richard Burr.

Key considerations: While proposals like the Earn to Learn Act are promising, they have a long way to go through the legislative process before they become law. That said, it’s worth noting that Congress doesn’t have to create new programs to make a significant impact on education funding – over the last several years, they have elected to expand qualified expenses under 529 College Savings Plans to include computer technology (2015), high school tuition (2018), apprenticeship expenses (2019) and student loan debt (2019). 529 plans also carry certain tax advantages as well as additional features like the ability to switch beneficiaries, making them an especially attractive college savings vehicle.

Will colleges re-open for in-person classes this fall?

While each institution is making that determination for itself, the broad trend is pointing toward the resumption of in-person classes. Where schools differ is on vaccine requirements for students and faculty. Many universities such as UCLA and the University of Michigan have made vaccinations a requirement before students can return to campus. Others like Florida State University recommend students get vaccinated but are not mandating vaccinations for the fall semester.

Adding to the confusion is when school policies come into conflict with state law. On April 1, Nova Southeastern University announced it would require students to be fully vaccinated for the fall semester – only to see the state’s governor issue an executive order the next day prohibiting vaccination mandates. NSU has since announced they are not requiring vaccinations for students, faculty or staff.

Key considerations: This issue remains very fluid, and with the Center for Disease Control and Prevention predicting a sharp decline in COVID-19 cases by July 2021, we expect individual institutions to issue additional policy updates throughout the summer regarding vaccination requirements. We advise reaching out to your individual institution for specific guidance.

There’s a lot of uncertainty surrounding the fall semester and how parents and students should think about education funding. For additional insight into the fastest ways to pay off student loans, check out “The Smart Way to Pay Off Student Loans” on And for parents looking for guidance on how to help out your student financially,  “Parental Loans and Paying for College” has some insights you might find valuable.

The information reflected on this page are Baird expert opinions today and are subject to change. The information provided here has not taken into consideration the investment goals or needs of any specific investor and investors should not make any investment decisions based solely on this information. Past performance is not a guarantee of future results. All investments have some level of risk, and investors have different time horizons, goals and risk tolerances, so speak to your Baird Financial Advisor before taking action.