Money Kuel Category Expert: Joy Alford-Brand
You might think that on a website for women who are forty-five and older that student loan debt wouldn’t be a relevant topic.
However, due to the increase in tuition and the advent of income-driven repayment plans in the last twenty years, student loan debt can be with you for life.
Parent Plus Loans:
Add to that the tendency of parents to take out Parent Plus loans to cover the shortfall of their children’s post-secondary educational expenses and BAM! It seems like we are in it up to our eyeballs.
I’m not even going to mention the effect the pandemic has had on student loans. Okay, I am going to mention it. In fact, I want to spend a few minutes talking about it. I believe, there are issues coming down the pipe that borrowers need to be aware of.
“Federal student loan payments and the accumulation of interest have been on pause for eighteen months.”
Accumulation Of Interest:
For instance, let’s start by addressing the elephant in the room. As of this month, federal student loan payments and the accumulation of interest have been on pause for eighteen months.
That means the vast majority of federal student loan borrowers have had a big financial break since March of 2020. That also means it won’t be long before they have to resume making payments. Borrower’s have had five months of being able to take a breath and not having to worry about student loans.
Pre-Pandemic Student Loan Debt Payments:
My concern is that folks aren’t going to be able to resume making their full, pre-pandemic student loan debt payments. You would have to be blind and seriously in denial to not see that scenario coming.
So, if you are one of those people who is worried about being able to make their federal student loan payments, here are five tips to help you get your federal student loan payments back on track, no matter how old you are.
Five Tips To Get You Back On Track:
“Choose the College Student and Graduate if you are in college or have graduated.”
- If you haven’t already, contact your servicer and ask for help to enroll in an income-driven repayment plan (IDR). If you are already in an IDR, ask your servicer to recalculate your payment based on your current income amount.
- Consider applying for an economic hardship deferment. While it won’t last forever and it’s not a permanent fix, it may help buy you more time to figure out your income situation.
- Consider applying for a regular forbearance. This really should be a last resort since interest will accumulate on unsubsidized AND subsidized loans (unlike an economic hardship deferment).
- If you have to apply for an additional forbearance, keep making interest payments on your student loans. This will really help keep your principal balance from ballooning to astronomical amounts. Trust me, it really does help keep your balance down.
- Check out one of my on-demand webinars which you can buy right here in the Kuel Life Shop, if you have questions about federal student loan debt. Normally, I wouldn’t suggest that in the body of an article but they are inexpensive and they do deep dives into all things federal student loan debt. You really can’t find that information very easily anywhere else. Choose the College Student and Graduate if you are in college or have graduated. Choose the High School Student webinar if you are thinking of taking out loans to send your student to college, or you already have loans. All Kuel Life Members receive 10% OFF, automatically.
How To Manage It:
Federal student loan debt doesn’t have to be the life-long burden many people think it is. The trick is knowing how to manage it. If you understand how it works, you can use the federal student loan program to your advantage and make the investment work for you. There is nothing more life-changing than getting an education. Don’t make financing a barrier to getting a degree.
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