The federal student loan forbearance period will end as scheduled on January 31, 2022, Jen Psaki, White House Press Secretary confirmed during a press briefing last week. Starting in February, federal student loan borrowers will resume their monthly payments.
“The Department of Education is already communicating with borrowers to help them prepare for the return to repayment on February 1.”
While the Education Ministry “is still assessing the impact of the omicron variant,” Psaki said “a smooth transition to reimbursement is a high priority for the administration.”
With less than 50 days left in the student loan forbearance period, several Progressive Democrats, including Senate Majority Leader Chuck Schumer (DN.Y.) are urging President Joe Biden to reconsider the move.
Read on to learn more about the end of COVID-19 student loan relief and how to prepare your finances for resuming payments. Also consider your alternative debt repayment options, such as student loan refinancing. You can browse student loan refinance rates from real private lenders in the table below and visit Credible to see your estimated interest rate for free without affecting your credit score.
BIDEN ADMINISTRATION PROBLEMS “FINAL EXTENSION” OF STUDENT LOAN PAYMENT BREAK
3 ways to prepare for the end of student loan forbearance
A recent survey by the Student Debt Crisis Center found that 89% of fully employed student loan borrowers do not feel financially stable enough to resume their payments in February. If you are among that vast majority, here are some steps you can take now to prepare for the end of the federal student loan repayment hiatus:
- Apply for extended abstention. Federal borrowers may be eligible for up to 36 months of additional student loan forbearance by completing an application for economic difficulties Where postponement of unemployment.
- Join an Income Based Repayment Plan (IDR). An IDR plan limits your monthly loan payment to 10-20% of your discretionary income, depending on the type of federal loans you have. You can subscribe to this student loan repayment plan at the Federal Student Aid (FSA) website.
- Reduce your monthly payments with refinancing. With student loan refinancing rates near historic lows, there’s never been a better time to lock in a lower rate on your student debt. Refinancing at a lower rate can help you lower your monthly payments and avoid default.
Data showed that student loan borrowers who refinanced with Credible were able to save more than $ 250 on their monthly payments, all without adding to the total cost of interest over the life of the loan. To decide if refinancing is right for you, visit Credible to see your estimated rate with soft credit. Then use a student loan refinance calculator to determine your potential savings.
THE âLARGEâ FORGIVENESS FOR STUDENTS STILL ON THE TABLE, SAYS EDUCATION SECRETARY MIGUEL CARDONA
Should You Refinance Your Student Loans?
Refinancing a student loan can help you lower your monthly payments and pay off your debt faster. And since interest rates are near their historic lows, now is a great time to get better terms on your student loan debt.
That being said, refinancing a student loan may not be for everyone. It’s important to note that refinancing your federal loans into a private student loan would make you ineligible for government benefits such as IDR plans, COVID-19 administrative forbearance, and certain student loan waiver programs.
You may also want to consider refinancing your private student loan debt, as these loans do not offer the same federal protections. And if you don’t plan on using the benefits of federal loans, the lower rates offered by private student loan refinancing may be worth the sacrifice.
Visit Credible to learn more about student loan refinancing from an experienced loan officer who can help you determine if this option is right for you.
THE PUBLIC SERVICE LOAN REDON IS JUST EASIER FOR 550,000 BORROWERS
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