Joseph Wrobel Shares Important Information for Student Loan Borrowers: The Student Loan Payment Pause
Student loan borrowers are weighed down by debt and are looking for any option to help them out as the student loan payment pause comes to an end this January 2022. While there are talks about President Biden’s hopes to cancel student loan debt for qualified student loan borrowers. There are other programs for student loan forgiveness for those who work in public service. Meanwhile, for those who are going into repayment, we offer several tips to understand student loan obligations and how to take advantage of opportunities to manage how student loan debt is repaid, in a way that makes sense to every borrower who is also paying inflated prices and trying to raise a family and work toward retirement.
Joseph Wrobel, Ltd., is a consumer bankruptcy law firm in Chicago and Attorney Joseph Wrobel cares about helping people get a fresh financial start and take advantage of all the opportunities to make money and save money.
In this short article, Joe Wrobel shares a few things student borrowers should know about changes with student loan payments, student loan servicing, and forgiveness options. The full Forbes article is: 5 Things to Know About The End of The Student Loan Payment Pause.
What is the Student Loan Payment Pause?
Most federal student loan payment plans are suspended on an interest-fee basis because of the CARES Act, which included financial safeguards for student loan borrowers. President Donald Trump signed the CARES Act on March 27, 2020, which included cash payments to individuals, economic relief options for businesses affected by COVID-19 and as well, a pause on federal student loan payments through December 31, 2020. Some in the business of student loan servicing call this a student loan moratorium.
Student Loan Payment Pause Ends January 31, 2022
The student loan payment pause that was scheduled to end at the end of 2020, was extended by President Trump, and again this student loan borrower relief program was extended by President Biden to continue through January 31, 2022. There are no indications at the current time that another extension is planned to be offered. This means that student loan payment obligations will resume as of February 1, 2022, student loan borrower payment obligations begin again.
Changes to Student Loan Servicing
Smart student loan borrowers communicate with their loan servicing agency to save money and pay student loans off quickly so they can save more money for the future or other important financial needs. When calling the student loan servicing company make sure to update them with current contact information so as a borrower, there are no surprises, and nothing is missed.
Student Loan Forgiveness
President Biden recently directed officials at the U.S. Department of Education to research and report on the president’s options to cancel $50,000 or more in student loan debt. Whether this is a realistic option remains to be seen, and if possible, such an action could be done with an Executive Order or it could be part of a federal act to help student loan borrowers. Read more about the Student Loan Forgiveness Memo Many student loan borrowers are also interested in the Public Service Loan Forgiveness (PSLF) program, allowing student loan forgiveness for people who devote their lives to public service careers, giving back to communities.
Beware of Student Loan Scams
Student loan forgiveness scams are on the rise according to a recent article by CNBC: Student loan forgiveness scams are on the rise. Here’s how to protect yourself. First, do not give your personal information to anyone unless you know that the person or organization is legitimate. Many scams come by email and look like they are coming from legitimate companies who may even look just like the regular student loan servicer. Pandemic-related financial scams are being reported in increasing frequency as crooks try to take advantage of people and families struggling to dig out from pandemic-related economic problems. Second, do some Google research about the name of the company sending an email or making contact. Try copying and pasting the subject line of the email to see if other people have reported a scam. Third, contact the student loan servicer company listed on student loan payment and interest statements. They can offer payment options and help determine if someone is trying to scam a student loan borrower.
Remember: It’s Not About How Much Money One Earns, It’s About How Much Money One Can Save
Social media memes are going around showing the increase in the price of a gallon of gas, and people who complain, while waiting in line for a cup of coffee, at many coffee shops, spending more than the price of a gallon of gas. Making money go further is important. While the amount of student loan debt seems high and it may feel like it will never be fully paid off, the interest rate on those loans is probably less than the interest paid on credit cards. What makes more sense, paying off the credit cards first and then tackling the student loans? What if it were possible to make the credit cards go away completely?
The amount of monthly income that goes to paying interest on credit cards and spent on expensive cups of coffee could be paying student loans and freeing up more money to save for the holidays. Bankruptcy can be an option for everyone, regardless of income. Whether it’s a Chapter 7 general discharge bankruptcy or a Chapter 13 reorganization plan, most people are surprised at how easily they can get back into good financial shape without all the extra monthly payments. Especially when people have already been affected by the COVID pandemic health-wise, people need help money-wise as well.