Should You Keep Paying on Your Student Loans Right Now?

TL;DR

Federal student loan payments paused until June 2023, uncertainty around $10k forgiveness plan, advice for borrowers on future payments.

Transcript

while payments and interests are still paused on federal student loans until June 2023 a lot of borrowers are asking when will the ten thousand dollar forgiveness plan actually go through should I still be making payments on my student loans what should I be doing now those questions answered in this video hey guys it's Justine with debt free Mille... Read More

Key Insights

• 🧑‍🎓 Over 26 million borrowers have had federal student loan payments and interest paused since March 2020.
• 🥺 The $10,000 forgiveness plan proposed by the Biden administration faced legal challenges, leading to uncertainty for borrowers.
• ✋ Borrowers with over $10,000 debt advised to save an emergency fund and pay high-interest debt.
• ✋ Borrowers with less than $10,000 debt recommended to redirect payments to high-yield savings accounts.
• 🌱 Planning for the potential resumption of payments and budgeting is crucial for borrowers.
• 🥶 Free tools like debt reduction calculators and budget toolkits can aid in organizing debt repayment plans.
• 🧑‍🎓 The importance of assessing payment history and adjusting budgets for future student loan payments.

Questions & Answers

Q: What is the status of federal student loan payments and interest amid the pandemic?

Federal student loan payments have been suspended, and no interest has accrued on loans since March 2020 due to the pandemic.

Q: What were the details of the $10,000 forgiveness plan proposed by the Biden administration?

The plan aimed to forgive $10,000 for eligible borrowers, with income limits and additional forgiveness for Pell Grant recipients.

Q: How should borrowers with over $10,000 debt prepare for the potential resumption of payments?

They should save an emergency fund, pay high-interest debt first, and continue making payments on their federal student loans to reduce balances.

Q: What advice is given to borrowers with less than $10,000 remaining in federal student loan debt?

They are advised to redirect their payments to a high-yield savings account earning over 3% APY to be prepared for the potential forgiveness or for lump sum repayment.

Summary & Key Takeaways

• Federal student loan payments paused with no interest since March 2020 due to the pandemic.

• The $10,000 forgiveness plan for eligible borrowers proposed by the Biden administration has been halted due to legal challenges.

• Borrowers with over $10k debt advised to save emergency fund and pay high-interest debt, while those with less can redirect payments to high-yield savings.