Student loans have long been a topic of conversation not only in the media, but also amongst the consumer that experience month to month the high financial expense of student loan payments. With the ongoing discussions about how to handle student loans now and in the future, there are many questions.
Will the government forgive any student loans? How long will the government suspend payments and interest? And when there are changes to federal loans, will that affect any private loans? We can’t say for sure if the government will forgive any student loans however, we can give you some smart tips on repaying your loans and while also providing you with some updates regarding federal student loan deferments.
Payment and interest suspensions can be a lifesaver
In March 2020, the federal government suspended payments and accrual of interest and halted collections of loans in default. This was a result of the economic impact of COVID-19. The Department of Education has suspended payments along with interest on all federal student loans through Sept. 30, 2021. This extension of deferment is to continue to allow folks the opportunity to use the funds towards other essential expenses.
If COVID-19 hasn’t affected you financially and your budget allows, you can continue to make payments on your student loans. All payments applied will go directly to the principal balance, which will result in paying down your loan quicker, while less money is paid in interest over the life of the loan.
To stay up to date on COVID-19 payment changes click here.
Flexibility with your payments
If you’re in a position where you are currently making your Student Loan payments, the Department of Education offers a variety of repayment plans. If after reviewing your finances, you notice the standard payments just don’t seem to work for your budget, you can apply for an income-based repayment plan which adjusts the amount you have to pay each month based on your income and family size. This can also be a good option if your outstanding debt is high. In addition, some repayment plans forgive any outstanding loan amounts after you have made payments for a certain amount of time.
To find out more about income-based repayment plans click here.
Public service could lead to loan forgiveness
Another option that you may want to consider to help with your student loan repayment is the Public Service Loan Forgiveness (PSLF) program. Under this program, if you have been employed with a government organization at the U.S. federal, state, local, or tribal level, or worked for a Not-for-profit organization that is tax exempt under Section 501C3, you may qualify for loan forgiveness of the remaining balance of your loan after you have made 120 qualifying monthly payments.
To see if the organization you work qualifies for PSLF click here.
Assistance for private student loans
Although the government doesn’t offer private student loans and many of the loan forgiveness programs and deferments have been specific to federal loans, many private loan providers have a variety of options available to assist and better fit your current financial situation. If you haven’t reached out to your lender, contact them and ask about their consolidation, refinancing or hardship programs.
You can work with your lender directly to create a plan to meet your needs. Just be sure to have all income records readily available. This could include bank statements, pay stubs, and any other information your lender may need to assist.
To see what your private student loan lender is doing click here.
Some companies and foundations offer loan repayment
As student loan debt has increased, some businesses, foundations, and other groups have begun offering repayment options. Check your professional associations, as there are all kinds of grants available. Nitro College has created a guide to student loan grants you can use to find the right grant for your needs.
If you still need help finding grants, check with your college or university’s career center or alumni association. They may have resources from businesses or foundations run by alumni or other groups that offer student loan repayment grants.
We understand simply having outstanding student loans can be stressful, but leverage the various repayment resources, stay on top of your payments, and most importantly, seek help if needed.