An Update on Student Loan Forgiveness
The Supreme Court struck down the president’s student loan forgiveness plan. Though President Biden announced intentions to find another path to loan forgiveness, it’s wise to plan for repayments to resume on schedule on October 1. Keep in mind that interest begins accruing again on September 1.
What should you do about your loans? Here are four specific recommendations:
1. Get updated details on your loan at studentaid.gov
Since the government paused federal loan payments in early 2020, some specifics about your loan servicer or your personal information may have changed.
You’ll want to check and update your account information as needed to be sure that future payments go where intended.
2. Determine whether you’re eligible for any special programs
Though the Supreme Court blocked a significant loan forgiveness program, you may qualify for loan forgiveness or special repayment terms under current programs.
Programs such as the Saving on a Valuable Education (SAVE) plan, Public Service Loan Forgiveness, Teacher Loan Forgiveness, or other federal or state-sponsored programs may allow you to lower your payments and even get some or all of your loans forgiven if you’re eligible.
Studentaid.gov is a good place to gather information about any programs you might qualify for.
3. Decide on a payment plan that works for you
You may have several payment plans available to you with different terms. Decide which one fits your current financial needs and consider setting up automatic payments (some loan servicers offer a discount if you do).
Note: I’d generally recommend against refinancing your loans right now as rates are high, but I’m happy to review options with you.
4. Start setting aside monthly payments now
You’re not alone if you’ve gotten accustomed to using your loan repayment budget elsewhere.
Once you know how much you’ll be paying each month, I’d strongly recommend setting that amount now so you can get used to the change in your budget.
Systems may be overwhelmed around October 1, so plan ahead to avoid technical issues.
If you have questions about how to choose a repayment plan or factor your payments into your overall financial plan, I’m happy to help. You’re welcome to schedule an introductory call with me using the link below.