12/18/2023 0 Comments Descent legends of the dark stl![]() Kantrowitz and Williams both believe the Biden administration will extend the freeze again, since it’s election season. ![]() “As I've navigated my adulthood, I've worked to increase my financial literacy to determine ways that I can create some generational wealth.” Are Americans prepared to resume payments? It matters for those who come after me.”īrown added that she can afford to make student loan payments at this time, but chooses not to. “I prioritize these goals, because I have to, and it matters for my family. As a result, it was important for her to concentrate on other financial goals, especially as a woman of color from a low-income, single-parent household. She says she grew up with little financial literacy. They’ve since converted the house into a residence for Section 8 voucher users, opened a Roth IRA account and are currently closing on a condo.īrown graduated with a PhD in college student affairs administration from the University of Georgia in 2019 and has almost $32,000 in student debt from her master’s and doctoral degrees. Cloud, Minnesota, says she and her husband were able to purchase a home for her sister-in-law in Alabama. Student success educator Lamesha Brown, based in St. Williams believes most borrowers may have been focusing on other important goals, such as putting a down payment on a home or increasing their overall financial stability. The federal government offers four income-driven repayment plans, which can see your remaining debt forgiven after making qualifying payments for 10 to 25 years. Lauryn Williams, founder of financial planning firm Worth Winning in Dallas, Texas, says that if you’re on an income-driven repayment plan and you owe more money than you make, paying down your student loans during the freeze is the equivalent of “flushing money down the toilet.” He adds that borrowers should also prioritize forms of higher interest debt at this time (such as credit card debt), bulk up their emergency fund and maximize their 401(k) contributions. “If you're working toward loan forgiveness, you don't want to make payments that aren't required because that reduces the amount of forgiveness you will ultimately receive.” “I don't recommend doing that in a couple of circumstances,” says Kantrowitz. However, he admits it’s unclear whether that figure represents borrowers regularly keeping up with their monthly payments, or borrowers who have made at least one payment during the freeze.īorrowers who have been making payments during the freeze are taking advantage of the 0% interest rate to chip away at their debt and potentially reduce the interest they will owe later. Department of Education data shows that, in reality, only 1.2% of borrowers have been making payments during forbearance. Mark Kantrowitz, student loans expert and author and publisher of, says his analysis of U.S. For cash-strapped grads, it's been a godsend. ![]() The pause on student loan payments and interest has been extended multiple times since it was first established under the Trump administration in March 2020. Too many Americans are still missing out on cheaper car insuranceīig stores don’t always have the best prices. If you owe $25K+ in student loans, there are ways to pay them off faster With inflation reaching new highs and no more federal aid in sight, time is running out to find new solutions. ![]() Like many graduates, Coleman says she’s not prepared to resume making payments when forbearance ends - currently set for Aug. “There are only so many jobs that are going to allow me to keep up with the salary and career trajectory that would allow me to pay off those loans in a reasonable amount of time.” Still, she says, that education wasn’t worth the financial burden for her. Some experts say the real number is even higher.Ĭoleman, an army veteran and founder of HR consulting firm Aurelian Black, was able to use government support for vets to cover some of the costs of attending the University of Phoenix from 2011 to 2018. “I am able to create experiences and create space and time for the people that I love.”Ī report from the Federal Reserve last month showed almost 60% of student borrowers made zero payments on their federal loans between August 2020 through December 2021. “I'm always going to be able to make money I'm not always going to be able to make more time,” she says. Burdened by almost $90,000 in federal and private student debt, Alphi Coleman says the loan freeze has afforded her time to unplug and invest in herself.
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