What if You Can’t Afford Your Student Loan Payments Even After Biden’s Forgiveness Plan?
Debt cancellation can only remove so much.
President Biden’s student loan forgiveness plan will bring relief to countless borrowers struggling to pay off their debt. However, it won’t necessarily relieve everything.
Student Loan Refinancing Could Save You Thousands
Choose from a range of refinancing options and receive a special rate discount. Medical resident and fellow programs are available.
Under the new plan, you may be eligible for $10,000 in debt relief – or $20,000 if you’re a Federal Pell Grant recipient. But that may only chip away at a small chunk of your grand total. And if your loans are either Federal Family Education Loans (FFEL) or Perkins Loans that weren’t consolidated into federal Direct Loans, your odds of obtaining forgiveness may be slim.
So even if you receive federal loan forgiveness, chances are you may still be in debt.
If you’re still struggling to make ends meet even after receiving government assistance, don’t fret just yet. You have options!
- Consider refinancing. You may be able to reduce your monthly private student loan payments and possibly your interest rates. But it’s important to act soon—before you incur more interest and rates rise yet again.
- Find an income-driven repayment plan. Search for repayment plans from the Department of Education that could reduce your monthly payment to a smaller percentage of your discretionary income.
- Consolidate federal loans. Replace your current loans with one of equal value to extend the repayment term up to 30 years. This is a good option for those who want to retain their eligibility for special federal loan forgiveness programs.
- Request forbearance or deferment. Pause your monthly payments until you’re financially stable. While this may provide needed temporary financial relief, be aware that interest will continue to accrue.
- Reign in your expenses. Consider cutting back on how much you spend on restaurants, travel, and entertainment (including streaming services or cable).
For many, the government forgiveness plan may not be enough. Taking the time to understand your student loan repayment options could save you a significant sum of money. Do your research so you can devise a strategy that ensures you can comfortably make your monthly student loan repayments and you’ll soon see the light at the end of the tunnel.
Learn more about student loan refinancing opportunities.
1“Student Loan Debt Statistics 2022,” Nerd Wallet, August 2022.