Wonder if you have to pay your student loans rights now?
If you’re one of the 42.9 billion borrowers that have federal student loan debt, you can breathe a sigh of relief.
On Friday, the Biden administration directed the U.S. Department of Education to extend the freeze on federal student loan payments.
Borrowers now have until February 1, 2022, before payments resume. Until the recent announcement, payments were set to start back up in October.
“This will give the Department of Education and borrowers more time and more certainty as they prepare to restart student loan payments,” Biden said in a statement. “It will also ensure a smoother transition that minimizes loan defaults and delinquencies that hurt families and undermine our economic recovery.”
So what does this freeze mean to you? Below I share how to take advantage of the student loan freeze:
- What should you plan for right now
- How to prepare for student loan repayments
Plus, the future of your student loan payments. Read on to learn more!
Will Another Student Loan Freeze Extension Happen?
The freeze has been a relief for students around the country. Since March 2021, we were able to lean on extensions and forbearance with a 0% interest rate. But will we get another freeze past February 1, 2022?
Most likely, no. Despite the unknown with COVID-19, the government is standing firm with the February 1, 2022, final extension deadline.
Education Secretary Miguel Cardona said in a statement, “As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment.”
That makes preparation now vital to getting back on your feet and ready to start making student loan payments once again.
How to Plan for Student Loan Payments
Like it or not, it’s time to get your budget on track to accommodate upcoming student loan payments.
Last week we shared informative on how to create a budget. Tips were in preparation for the prior deadline of October 1, 2021. But that doesn’t make them any less relevant based on this extension.
Planning ahead for the future is always a good move.
Use the same tips that we shared to make sure you’re not caught off guard this coming February.
The Future of Federal Student Loans
The extension on federal student loan payments may not continue past February 1, 2022 but there is good news.
Student loan debt advocacy groups partnered with Government officials from both sides of the aisle have been working on coming up with solutions. Their efforts combined have put a fire under the U.S. Department of Education.
Between now and February the U.S. Department of Education is actively working to change student loans. While 100% loan forgiveness is most likely off the table, they are working to improve student loan terms in general.
What would this include?
Things like student loan repayment, student loan forgiveness, and student loan cancellation.
As President Biden feels pressure to make further changes, we’ll keep a close eye on how this all plays out. Debt cancellation is a part of Inversant’s mission in helping students access higher education without a significant debt load.
That means we’ve got your back!
What You Need to Do Next…
While there may be a pause on your student loan payments, that doesn’t mean you shouldn’t take action.
Make sure you remember to:
- Get your budget in order before you have to – prepare now before you fall behind
- Check out our blog to help you plan ahead for your upcoming federal student loan payments
Keep your eyes and ears open for changes the U.S. Department of Education makes to student loans.