Money Thought Leader: Joy Alford-Brand
Readers, are you wondering if you or your college-aged child is ever gonna get federal student loan forgiveness?
Well, guess what? You are not alone. Practically every federal student loan borrower in America is on the edge of their seat, waiting to see if the current administration will make good on its promise to forgive your federal student loans.
“The current federal government wants to forgive federal loans and other folks at the state level disagree..”
They’ve thrown down the gauntlet and “the other side” has accepted the challenge by filing lawsuit after lawsuit in federal court. It would be funny if it weren’t so serious. Good grief, talk about stress!
So, What’s The Deal?
Ok, as you’ve probably guessed, the arguments are pretty straightforward. The current federal government wants to forgive federal loans and other folks at the state level disagree, saying it would harm them financially.
This whole situation has been exacerbated by a few things, including the pandemic, the exorbitant cost of a college education and overly complicated repayment plans. It’s enough to give you a headache the size of Texas, if you ask me. However, we do need to talk about it because there’s a good chance that women over forty-five could be affected by this situation, possibly even you!
What You Need To Know Now About Federal Student Loans!
First of all, the current administration is pressing forward with federal student loan forgiveness so you should, too. If you have federal student loan debt and you are single, earning $125,000 or less per year (or married, earning less than $250,000), get thee to https://studentaid.gov/debt-relief/application and submit your application for forgiveness, ASAP!
This is true for your college-age kids, too. While the current lawsuit is blocking forgiveness of loans, the Department of Education is accepting applications and reviewing them for eligibility right now.
“Second, the current extension of the pandemic forbearance is ending on December 31st.”
Second, the current extension of the pandemic forbearance is ending on December 31st. That means you have about seven weeks until you need to start making payments again. Apparently, this is the last extension… I swear! Having said that, I would get ready to start making those payments. This is one time when the old adage of “expect the worst but plan for the best” really applies. Don’t get caught holding the bag if the courts overturn this forgiveness plan. It’s a real possibility!
Third, if you don’t think you’ll be able to make your payments come January 1st, get with your servicer and make a plan to avoid default. This could include enrolling in an income-based repayment plan, seeking a deferment, or a consolidation loan. Whatever you decide to do, just know that defaulting on your loan could mean garnishment of your wages, offsetting your tax refunds or even garnishment of your Social Security payments. I don’t need to tell you what a financial catastrophe that would be!
Help Is On The Way (Hopefully)!
The good news is the current administration has the power to change the current (and extremely problematic), income-based repayment plans and they have sworn to do it soon. They have pledged to fix the problem by creating a streamlined repayment plan with expanded eligibility for folks who are struggling under the weight of student loans. Having paid a boatload of student loan debt myself, I am happy to hear that current borrowers are about to get some real relief!
Additionally, this administration has pledged to hold colleges and universities accountable for their financial shenanigans. This includes publishing a list of schools who have the students with the highest debt amounts and who have failed to assist students in finding jobs after leaving school, at the very least.
Charge Less For A College Education:
How they intend to encourage schools to charge less for a college education is a little more uncertain, short of trying to make community college free for everyone and expanding government programs like the Pell Grant.
Finally, always remember that you are your own best advocate (and usually your only advocate). Remember when your mother told you “if there’s a will, there’s a way?” She was right, as usual. If you are persistent, you can manage any situation in your life, including your student loans. Stay positive, my friend!
About the Author:
Joy Alford-Brand is an author, public speaker and attorney. She graduated with Bachelor’s Degree in History from Wright State University in Dayton, Ohio in 1994 and she received her Juris Doctor from Ohio State University College of Law in 1998. Her main area of practice is Bankruptcy. She is admitted in North Carolina where she lives and works. Joy founded newcashview.com in 2015 as a platform through which she could help others work toward financial freedom and peace of mind! For more information, check out newcashview.com.