KEY POINTS:

  • (1) No $10,000 Student Loan Forgiveness

  • (2) Temporary Tax Relief for Student Loans Forgiveness until January 1, 2026

  • (3) Biden hasn't extended the 0% payment and interest CARES student loan freeze, so the bill is still set to expire by the end of September 30, 2021.

  • (4) Small Business Relief For Business Owners With Defaulted Student Loans

  • (5) Special ODsonFinance $1000 Bonus from Splash and Credible Refi Lender with current lowest rate offered of 1.89% Variable/ 2.63% Fixed

On Wednesday March 10, 2021, the House approved President Biden’s $1.9 trillion stimulus bill called the “American Rescue Plan”. The legislation is one of the most sweeping economic recovery plans in the nation’s history.


The package’s biggest provisions include $1,400 direct payments for taxpayers with earnings less than $75,000 per year (or $150,000 for married couples), extended federal unemployment benefits of $300 per week through September, $170 billion to reopen schools, $100 billion to expand vaccine distribution, and an expanded child tax credit that could provide up to $3,600 per child in financial support.


Stemming of the American Rescue Plan, this article will focus on 5 take-aways for student loan borrowers:

(1) No $10,000 Student Loan Forgiveness

Opinion: We have been expecting this for a while, it is going to be hard to convince congress to cancel this much student loan debt and make it fair for all types of borrowers, both private or federal.  While Biden does support $10,000 forgiveness, he recently came out against $50,000 forgiveness. We wouldn’t hold our breath on this issue, since we believe that it is very low on Congress’s list of priorities and doesn't have Republican support. 

(2) Temporary Tax Relief for Student Loans Forgiveness until January 1, 2026

A small provision is included that exempts all student loan forgiveness from taxation now until January 1, 2026. The exemption is broad, covering government-held federal student loans, federally-guaranteed FFEL-program student loans, and private student loans.


Opinion:  This is kind of useless since it expires in January 1, 2026. Those on the 10 year PSLF Plan DO NOT have a tax bill due upon forgiveness anyways. 

  • For those currently in the 20-25 years total loan forgiveness program, this won’t help you at all, because the first major batch of non-PSLF forgiveness won’t happen until 2033 since the first round of PAYE program started in 2013. In the meantime, continue saving for that massive tax bill due if you are pursuing total 20-25 non-PSLF loan forgiveness. 
  • HOWEVER - I do believe that this will create a “foundation” for possible future tax relief. So stay tuned. 

(3) Biden hasn't extended the payment forbearance and 0% interest CARES student loan freeze, so the bill is still set to expire by the end of September 30, 2021.

Opinion: Sources indicate that this is probably the absolute last date it will be extended, so payment and interest rates will likely resume after this date. Our advice is still the same: those optometrists with FedLoans, enjoy the 0% benefits, make extra payments (more will just go toward principal) and/or prioritize investing more for retirement or short-term financial goals like saving for a house. Then reassess when more news comes out at the end of 9/30/21.


  • Those with private refi loans: if you can get 1% better, now is the perfect time to refi. As always, we will strive to keep up on the latest news so stay tuned!
  • Weighed Risk Decision: While it is rumored that the feds won’t make any major changes to the federal interest rate until 2024, some optometrists are taking the risk to take advantage of fixed low refi rates right now before the student loan 0% interest expiration - if you choose to do this, please do so at your own risk.

(4) Small Business Relief For Optometry Business Owners With Defaulted Student Loans

Opinion: The stimulus package also includes $7.25 billion in additional funding for the Paycheck Protection Program (PPP), a pandemic relief fund that provides forgivable loans to struggling small businesses. President Biden recently eased restrictions for the Paycheck Protection Program, expanding its eligibility to include business owners with defaulted or delinquent federal student loans. These business owners may have been previously barred from obtaining PPP relief. This is great new for private practice OD owners who are struggling with past history of student loan default to get access to PPP loans

(5) Special ODs on Finance $1000 Bonus from Splash and Credible Refi Lender with current lowest rate offered of 1.89% Variable/ 2.63% Fixed

We are currently in negotiation talks to leverage our community to give you the best rates and highest cash-back bonus to our members. Our two most-used student refi lenders Credible and Splash will continue to support our OD community. Negotiation talks should be finished by next week and we will hopefully be able to continue to extend the $1000 bonus. 


As always, Dat and Aaron will continue to keep you updated on any student loan news with the ever-changing political and economic climate! So keep checking back!

Want to learn how to manage? Check out  The Optometrist's Guide to Student Loan

Want to get the lowest Re-fi Student loans and highest Bonus? Check out List of Recommended Student Refi Lenders  

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About DatBuiOD

Dr. Bui is a lead optometrist at the Apple Wellness Center in the heart of Silicon Valley. He has a deep passion for ocular disease and healthcare technology. He started his career with $230K of student debt and has been focusing on strategies on attacking this massive debt such as budgeting and personal finance, along with investing. He is a big advocate for passive index funding with a small portfolio toward technology stocks. Lastly, he wants to help all new doctors and high-earning professionals navigate toward wealth and financial independence.

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