If you’re one of the millions of borrowers who have been benefiting from the student loan pause on federal student loans since March 2020, you’re likely curious about when this financial breather will come to an end. The big question on everyone’s mind is: When will student loan payments resume? Let’s dive into the latest student loan news to find out.
When Will Student Loan Payments Resume?
The student loan pause, which many have found to be a financial lifesaver, is scheduled to end on Sept 30, 2023. That means payments will be due starting October 1, 2023. So mark your calendars and start planning your budget accordingly.
If you own a home, JVM Lending can assist with consolidating your debt to make this transition smoother. What makes this option so appealing is that mortgage borrowers who pull cash out of their homes to pay off student loans get a special rate reduction that other cash out borrowers do not get, and our experts here at JVM Lending can explain how that works.
What’s the Latest Student Loan Update?
President Biden has been in the spotlight for his plans on Biden student loan forgiveness. While there’s been a lot of chatter, no concrete steps have been taken to forgive federal student loans universally. However, there are existing student loan forgiveness debt relief programs you can explore, especially if you work in public service.
How Can I Save on My Student Loan Payments?
Saving on a valuable asset like your education is crucial. One way to save is by choosing the right student loan repayment plan. Your payments can be calculated based on your income and family size, which could significantly reduce your monthly dues. Visit StudentAid.gov to save time and find a save program that suits your needs.
JVM Lending can help you explore these options as well and even assist with a home equity loan that could also be used to pay off your student loans and other debts in order to significantly reduce your monthly payments.
Is There Any Way to Lower My Student Loan Interest Rate?
High interest rates can be a silent drain on your finances. You can also try reaching out to your student loan servicer if you think you’ll have trouble making payments. While federal student loans have fixed rates that cannot be lowered, refinancing with a private lender could lower your rate.
If you own a home, JVM Lending can help you explore a debt consolidation refinance that could both lower your effective interest rate and your payment. Keep in mind, however, that you may lose federal benefits like student loan forgiveness debt relief, if it ever comes to fruition, if you do pay off your student loan. We explain how a debt consolidation refinance works at the end of this blog.
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April 28, 2024
What About Biden’s Student Loan Forgiveness?
The news has been laden with reports about President Biden’s student loan forgiveness plan for a while now, but nothing is yet set in stone. While President Biden has expressed interest in forgiving a portion of federal student loans, Congress has yet to pass any legislation and the courts continue to shut him down. Don’t lose hope though; keep an eye on student loan debt news for any updates.
Are There Any Other Debt Relief Student Loan Options?
Absolutely! Apart from the much-discussed Biden student loan debt relief plans, there are existing programs like Public Service Loan Forgiveness (PSLF). If you work in a qualifying public service job, you could have your loan balance forgiven after making 120 payments. That’s a significant chunk of student debt relief borrowers can benefit from.
Switching to one of the multiple Income-Driven Repayment (IDR) plans could significantly reduce required loan payments, even down to $0 in some cases! And, once you join an IDR plan, you can easily switch to another IDR plan as your job and life circumstances change.
How Do I Prepare for When Student Loan Payments Resume?
Preparation is key. With the student loan pause ending on Sept 30, 2023, now is the time to have a plan in place. The most important thing for student loan borrowers to do is explore all of their options.
Those with student loan debt issues should start here: Studentaid.gov
What If I Can’t Afford Payments When They Resume?
If the thought of resuming payments is daunting, you’re not alone. Income-driven repayment plans can make your payments more manageable based on your discretionary income and family size. JVM Lending can help you explore these options and more – you can reference additional information in this blog.
If you want to just play around with different scenarios, this free Loan Simulator tool can help you run through your options at a high level.
What Happens If I Miss the 21-Day Window for Resuming Payments?
If you miss the 21-day window after Sept 30, 2023, your loans could go into default. This is a serious situation that could affect your credit score and eligibility for future financial aid. So, it’s crucial to be prepared and make your payments on time.
How Does a Debt Consolidation Refinance Work?
If you’re feeling overwhelmed by multiple debt payments with student loan payments resuming, you might consider a debt consolidation refinance. But what exactly is it, and how does it work?
Simply put, a debt consolidation refinance (a type of cash-out refinance) allows you to combine various types of debt—like student loans, credit card balances, and even car loans—into a single loan, often with a much lower interest rate. This can simplify your financial life by giving you just one monthly payment to manage.
The Role of Home Equity
If you own a home, you’re in a particularly advantageous position. You can tap into your home’s equity to secure a loan with a lower interest rate than your existing debts. This is where JVM Lending comes into play. We can guide you through the process of using your home equity to consolidate your debts, including those pesky student loans that are set to resume soon.
Benefits of Debt Consolidation
- Simplified Payments: One of the most immediate benefits is the simplification of your finances. One monthly payment is easier to manage than multiple payments to various lenders.
- Lower Interest Rate: By using your home’s equity, you’re likely to secure a loan with a lower interest rate, which can save you a significant amount of money over time.
- Lower Payments: By turning your shorter-term student loan debt into 30-year mortgage debt, your overall monthly payments will often end up being much lower.
- Financial Flexibility: With lower monthly payments, you’ll have more discretionary income to save, invest, or even put towards other financial goals.
Conclusion & Next Steps
The looming resumption of student loan payments is a concern for millions of Americans. While the student loan pause has offered a temporary reprieve, it’s vital to prepare for what comes next. Whether you’re keeping tabs on President Biden’s push for student loan forgiveness or other debt relief options, staying informed is your best strategy.
If you own a home, JVM Lending can assist with debt consolidation or a home equity loan to help you manage or even pay down your student loan balance. Don’t navigate these complex waters alone. Reach out to the experts at JVM Lending for a free consultation and take control of your financial future today!
Contact Hannah Papazian at JVM Lending to talk through your options at (925) 478-5934 or schedule a call with Hannah.
