Biden is canceling up to $10K in student loans and all federal loans are paused until 12/31
There is a lot of uncertainty regarding COVID relief –– will it be extended again? For how long? What should I do in the meantime? We’ve gathered some information to help you!
As of now, COVID relief will end January 31, 2021. You can read more about the details of the relief here.
How you can prepare:
Now is the perfect time to build up your emergency savings account. If you don’t have one yet, it’s not too late! Read more about saving while you have debt here.
You might have forgotten how much you owe and the interest rates for each loan, so we suggest first gathering all the information in one place so you can then create an action plan. You can do this through Snowball Wealth! When you sign up, you can sync up all your student loans, both federal and private, to manage them all in one place.
After gathering your student loan information, take a look at your budget. If you don’t have a reliable budget, you can download the one we create for free here. Know how much income you bring in, how many expenses you have, and ways to cut costs or increase your income. After reviewing your budget, set an amount that you can realistically contribute to paying off your student loans every month.
Before you start paying off your student loans, take a look at your repayment plan options.
Here are some example options, but there are dozens of options. Check your Snowball Wealth account or contact your servicer for more options:
Standard Repayment Plan
This option is the default repayment plan because it increases the amount of money you contribute to your loans monthly. Over time, you will be able to pay off your student loans sooner. If you have a steady income, we suggest remaining on this plan.
Graduated Repayment Plan
If you are not ready to contribute a large amount of money to your student loans, this plan starts off your monthly student loan at a low amount then increases about every two years.
If you don’t have enough money to pay off your student loans monthly, apply for an unemployment deferment.
If you have private loans, you are not eligible for COVID relief, however, your lender may provide some relief, check to see if they have any programs for financial hardship if you need it. You may also be able to refinance your private loans. You can also log into your Snowball Wealth account for more information and a step by step guide for refinancing.
Stay up to date with all the policy changes going on with our Student Debt Report!