COLORADO SPRINGS — With the student loan forbearance extended until January 31, many borrowers are wondering what to do next.
Borrowers like Renee Newman supporting the decision, and calling for Washington to take it one step further and forgive them completely.
“There’s either super-rich people that go to school or the super poor that end up taking out a lot of loans or grants,” said Newman.
After getting her engineering degree, Newman left college with $40,000 in student loan debt. But thanks to an income-based payment plan, she hasn’t had to make payments, deciding to focus on putting food on the table.
“We have to decide on groceries, gas for the vehicles to and from work is going to be more important. Paying utilities,” said Newman.
Andrew Pentis, Senior Writer and Student Loan Counselor for Lending Tree, recommends borrowers who can make payments during this time to do so. But for those who can’t, focus on the debt with the highest interest.
“So if you have credit card debt or auto loan debt with higher interest rates then prioritize making those payments,” said Pentis.
Especially since interest is likely to accrue more quickly on those than student loans. While it’s perfectly fine to enjoy the break from payments, Pentis says borrowers should not rely on another extension or what a new administration might do.
“At least in the early stages of the Biden administration, I think what’s likely to happen is they’ll focus their efforts on more immediate and impactful relief,” said Pentis.
He says it’s important borrowers make a plan now rather than in January.
“Be proactive and talk to your lender or loan officers about your options so you’re in the best position when they resume,” said Pentis. “If you have seen your income drop over the last few months, your new monthly payment under an income drive repayment plan will reflect that lower-income. Alternatively, you could look into forbearance or deferment to pause your loans if you need to.”
Newman says an additional month won’t solve the overall problem many borrowers face and action needs to be taken now. Anyone with questions or concerns regarding their student loans can visit the Lending Tree website for helpful guides and calculators.