- April 21, 2021
- By: P.T. Phan
Everyone who calls GreenPath receives a free financial counseling session. GreenPath’s professional counselors will listen respectfully and support you in reviewing your situation. The counselors will give you advice on budgeting and planning.
ON DEMAND – VIEW NOW: Dealing with student debt? You’re not alone. In fact, student loans currently account for over $1.56 TRILLION of total consumer debt in the U.S—second only to home mortgages. Whether you are one of the 44.7 million borrowers who currently carries student loan debt, or are planning on taking out a student loan in the future, this webinar can help to empower you to make informed decisions for your financial future.
In this webinar, we explore:
- Choices that may reduce your need for student loans
- The true cost of student loans
- Student loan repayment strategies
Jan 2021: Updated with news of the extension of student loan payment pause. Borrowers will not have to make payments until October 1, 2021 at the earliest, extending the already unprecedented pause on payments by eight months.
As a recent college grad, it’s possible you face unexpected challenges related to the ongoing pandemic. But we’re here to remind you that it’s a time to celebrate!
An important chapter in your lives has come to a successful conclusion. You completed your education and are ready to start your career path, or perhaps you will continue post-graduate studies in your area of discipline.
Managing Your Student Loan Debt in a Time of COVID
Along with the celebration, it’s also a time to understand what it takes when managing student loan debt through a challenging time.
It’s a reality that student loan debt will impact recent graduates. In fact, student loans currently account for over $1.56 Trillion of total consumer debt in the U.S—second only to home mortgages.
The other new reality is keeping track of regulations offering relief.
View Our Webinar: Understanding Student Loan Options
Check out our webinar on all things student debt. Whether you currently carry student loan debt or plan on taking out a student loan in the future, see how to make informed decisions for your financial future.
CARES Act and Student Debt
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress in March 2020.
With the new Biden Administration, the most recent extension suspends requirements to pay principal and interest on federally held student loans through October 1, 2021.
If no other action is taken, 42 million borrowers will have to resume their payments at that time.
Note that the student loan relief provisions are limited to government-held student loans only, leaving out commercially held federal loans, Perkins loans, and private loans
The regulation suspends federal student loan payments, reduces interest rates on federal student loans to 0%, and pauses federal student loan debt collection on defaulted student loans.
For those with government-held loans, the relief options offered through the end of September 2021 give you a “breather” that many find useful.
But what’ happens after the relief programs end?
Understand the Full Picture
Once temporary relief programs end, managing student loan debt is doable with the right information. When you understand repayment options — standard plans, extended plans, income-based plans and other payment options – you feel more in control.
To manage confusion that comes with changing regulations, student loan counseling from impartial and expert guidance has never been more important.
To take advantage of the best student loan payment plan for your specific situation, it’s helpful to get guidance from counselors who can review the makeup of your specific student loans and help you understand repayment plans.
As a recent article in HerMoney notes, there are specific steps to take for people struggling to pay student loans.
Student loan counselors can suggest ways to manage an individual situation if you are feeling overwhelmed when relief programs end.
Start a Conversation about Managing Student Loan Debt
You’ve completed an important milestone — congratulations are in order!
As you take your next steps, remember there are resources available when managing student loan debt.
A good place to start is with a free consultation from someone who has your interests at heart
Our NFCC-certified counselors help you begin a conversation about where you are today, and what you need to accomplish your goals.
We guide you to assess your financial situation related to student loans as well as your full financial picture and help create an action plan to move forward.
From HerMoney, featuring GreenPath’s Jeremy Lark, Senior Manager for Client Services. Read the steps to take if you are struggling to pay student loans.
If you are struggling to pay student loans, it can be helpful to understand the financial relief benefits in the Coronavirus Aid, Relief and Economic Security (CARES) Act.
The economic stimulus bill provides student loan relief for borrowers with federal student loans.
Although the laws don’t relate to privately held loans, there are still steps you can take. You’ll need to use different savings strategies if you’re suffering financial hardship due to the COVID-19 crisis.
This HerMoney article summarizes steps to take if you’re in a financial bind, including insight from GreenPath:
Contact Your Private Loan Servicer
Those with private student loans are not covered by the new agreement. That’s OK. Find your loan servicer’s contact information on your latest bill, or head to its website. Most have a page dedicated to COVID-19 that explains borrower options and how to contact the company.
When you contact your loan servicer, explain your situation and how you’ve been impacted by the coronavirus. “The majority of private lenders have been willing to work with borrowers on things like 60- to 90-day payment deferments,” says Jeremy Lark, senior manager of client services at GreenPath Financial Wellness.
Some loan servicers may also provide student loan relief by waiving certain fees or working out a new payment plan to keep your account in good standing.
Make sure you understand how forbearance works. Typically, you can skip payments for a few months. But interest will continue accruing and may even be “capitalized,” or rolled into the unpaid principal. That increases the cost of your loan.
Reallocate Money in Your Budget
Those struggling with student loans should look at the big budget picture.
Lenders, insurers and utility companies are offering their own forms of assistance during the crisis, Lark points out. “Money that normally would have been used to cover these costs can be redirected to cover loan payments,” he says. It can help keep your account in good standing, at least until you reach an agreement with your private student loan servicer for student loan relief.
Consider Nonprofit Credit Counseling Services
The HerStory article concludes with a reminder to reach out to a nonprofit credit counseling agency. Caring, judgment-free one-one-sessions are available to you from the nonprofit GreenPath Financial Wellness.
To learn more steps that you can take and to read the full HerMoney article, click here.
GreenPath Is Here To Support You
Our financial counselors are available to talk about debt and financial wellness. Student loans are part of the picture. One-on-one counseling will help you identify options that can relieve financial stress and make it easier to manage finances.
Jeremy Lark is dedicated to combating financial strife and stress through financial wellness, education, and technology. Through his work as Senior Manager of Client Services, he has helped GreenPath’s clients find the tools and resources they need to turn their lives around. Jeremy has been with GreenPath for 12 years, and while a born-and-bred Yooper, currently resides in the Detroit area.