The pandemic has changed so much of our daily lives, including our financial situations. In 2020 The federal government suspended student loan payments. However, payments will begin again January 31, 2022. Here are some options you have when it comes to paying for your student loans again.
Income-driven Payment Plan
One option is an income-driven payment plan based on your monthly income. If your income has decreased you can request recertification through financial aid. You will be provided with lower plans that are more aligned with your current income. Be aware that lowering your monthly payments will lengthen the amount of time it will take to pay off your student loans. To apply and learn more visit the Federal Student Aid Website: https://studentaid.gov/app/ibrInstructions.action
Alternatively, you can choose to refinance using a private lender. In this case, a private lender can pay your student loan debt in exchange for a new loan with lower interest rates. If you choose this route take caution because interest rates may fluctuate over time. It is suggested to choose a plan with a fixed rate, so that your interest will remain consistent.
There are two types of deferment, economic hardship and unemployment. Deferring a loan gives you the option of not repaying for up to three years. However, it is important to note that unsubsidized loans will still gain interest during deferment. If you are currently unemployed you may qualify for loan deferment. If you already receive public assistance you may qualify under economic hardship. Additionally, PeaceCorps volunteers are eligible for deferment. Full time workers earning less than minimum wage and with an income below the state poverty line may be eligible as well. We hope these tips help as you prepare for the upcoming year.