Question: “I have high student loan debt, about $80,000 in total. When I got the loan, I thought I’d pay a lot less than I paid for. Worse: I couldn’t even access the degree. Now I I only make $40,000 a year, and I’m the only person working in my household. Debts are on hold now, but I’m worried when it stops. I need help figuring this out.”
Need help with student loans or other debt?
Email [email protected],
Answer: Like a lot of students who have enjoyed a break on their federal student loans – as part of the coronavirus relief package, the government suspended loan payments, slashed a 0% interest rate and stopped collections on defaulted items – You see that the end is near. The program is due to end in May 2022, and you are concerned. The first thing to know is that you’re not alone: According to the Education Data Initiative, the average student loan borrower owes more than $36,000 in debt. Good News? You have options to help you manage debt. Here’s what you might want to consider.
The first thing to do if you are struggling is to contact your loan servicer to talk about what your options are. A good option for you may be to look into income-driven repayment plans for your federal loans (details Here) “If your dues and your monthly payment seem unbearable, [a good] There is an option to contact your servant regarding enrollment in an income-driven repayment plan. This will limit the payout to a portion of your income and extend your repayment to 20 or 25 years. After the term is up, the balance is forgiven,” explains student loan specialist Anna Helhoski of NerdWallet. There are other repayment plans for federal loans (details Here) that you may consider.
Loan forgiveness may also be an option, says Lee Busby, financial wellness program manager at Johnson Sterling. In fact, if you work in public service — employed full-time by a U.S. federal, state, local or tribal government or non-profit organization — and your student loan debt is federal, you can seek public service loan forgiveness. There are other ways to get loan forgiveness, which you can learn about Here, which includes forgiveness options for some teachers, and some in the medical field and military. what’s more, more Thanks to the new policies of the Biden administration, people are now eligible for loan forgiveness. Some employers also get some student loan relief as part of their benefits package.
Another option for those struggling with student loan debt? “You can also refinance personal loans to lower interest rates if you can qualify for them,” Busby says. while it is true that Interest rates on student loan refinances are very low right now, as you can see hereWhile a lower interest rate can mean significant savings for the borrower, those with federal loans should think twice, as you could potentially forfeit federal security such as deferred, forbearance or income-based repayments. Before you refinance loans, read Businesshala’s choice guide to refinancing your student loans here.
*Edited question for clarity