If you have federal student loans, your monthly payments are on pause at least through September 30 thanks to President Joe Biden extended the loan payment suspension period soon after entering office.
And while that can certainly provide some much-needed loan relief if a student loan borrower was suffering undue hardship related to the coronavirus pandemic, it’s not a permanent solution by any means — especially if you were struggling with student loan repayment before COVID-19.
But what if you have private student loan debt? Read on for the latest federal stance on student loan forgiveness, and if you’re considering refinancing your private student loans, be sure to use an online tool like Credible to compare student loan refinancing rates from multiple lenders without affecting your credit score.
Will private student loans be forgiven?
A recent $1.9 trillion coronavirus relief bill did not include any provision to cancel student debt, even though Biden and members of Congress had discussed forgiving anywhere from $10,000 to $50,000 in student debt. While a proposal to forgive debt could come through an executive order, the plan would likely apply only to federal student loans.
“From a financial planning perspective, the proposals of student loan forgiveness leave borrowers in a tough spot,” said Brad Griffith, a financial planner at Buckingham Advisors. “It’s still unclear how realistic it is that any forgiveness package makes it through Congress, so borrowers are left waiting on if the loans will be forgiven and how long they have to wait.”
If you’re one of the many borrowers hoping your federal student loans will be canceled in the near-term, Griffith recommends a proactive approach. Take advantage of your paused payments, and start saving up in case loan forgiveness is delayed or comes in less than you expect.
If you have private student loans and looking to lower monthly payments and ease the burden of student loan debt, then consider refinancing your student loans. Lock in some of the lowest interest rates ever via the online marketplace Credible.
