Start a Plan for Student Loan Payments Resuming
Federal student loan payments have been on hold due to the Covid-19 pandemic for over a year now. Interest on federal student loans has also been at 0%, but this will be changing soon. The emergency relief will be ending on January 31, 2022, and you’ll once again be responsible for paying your PA student loans. You must create a plan early if you have barriers that keep you from paying your student loans.
The emergency relief applied to federal student loans only. If you have private loans, these rules do not apply to you. Most PA students can obtain Federal Direct PLUS loans to pay for their PA education, but some choose to refinance their loans. This decision often leads to lower interest rates and huge savings on student loans. However, once you refinance to private student loans, you no longer get the benefits of federal loans, such as student loan forgiveness.
The government recently announced new rules for public service loan forgiveness. If you have been working for a non-profit hospital, you could qualify for student loan forgiveness after working ten years for a qualifying employer. One of the changes is that for limited PSLF waiver allows all payments by student borrowers to count toward PSLF, regardless of loan program or payment plan, making it easier to get forgiveness.
If you don’t qualify for forgiveness currently but still need help paying for your loans, make sure to apply for an income-driven repayment plan. These plans allow you to lower your payments based on your income, making it more affordable for borrowers. This program applies to federal student loans only, and you won’t be eligible to participate if student loans are through a private lender.
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If you currently have private student loans but are still looking for ways to lower your payments, you could look at refinancing them again. Refinance rates are low, and it might be an opportunity to get a lower rate. One company to check with is Juno to see if they can get you a lower rate. Juno uses collective bargaining to negotiate lower rates when you refinance.
There is still a chance that widespread student loan cancellation will occur, as President Biden has previously talked about, but this is not anywhere close to a done deal. The only thing that is guaranteed is that you’ll be responsible for your student loans payments once again at the end of January. Use the next couple of months to do your research and have a plan on how you’ll start paying your loans again.
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