Money Talks: Student Loan Repayments Are Coming Back
In early 2022, student loan interest will return with minimum payments.
TEMPLE, Texas – The payment break and the interest waiver on federal student loans will soon end starting early next year.
Starting in February, minimum payments will resume and interest will return for more than 40 million Americans.
The federal government’s repayment hiatus on federal loans has been in effect since March 2020 due to the pandemic, but what will happen now that payments will restart?
6 News financial planner Rolandus Johnson gave us the scoop.
Johnson told 6 News, âI would say myself personally, that’s just kind of my opinion, just say, if you can weed out some without any interest, please do it by all means. Because once that interest comes back it’s going to hit and it’s going to hit fast and furiously in my opinion and so, again, and we come back to the revenue wiggle room, if you’ve got the capacity to do that, knock him out. And it could take a year or two, maybe three or five years without paying off that student loan. “
If you’ve been able to make payments in the past 18 months, great for you. But if you’re about to be hit hard by restarting a new minimum payment, it might be time to take a different approach.
The Department of Education said we were in the middle of the âlast expansionâ.
Johnson told us you still have choices, saying, “Refinancing will always be a great option. I think the average is six to seven percent on student loans and if you can get that financing up to the rates. current, maybe two, maybe what one percent? Man, it’s gonna take years time there. And maybe with the money in your pocket, refinancing is still a great option and if you haven’t reviewed it already, you’re it probably missed the mark on this. “
Again, if you have a private student loan, you’ve never had a break in payment and interest. And it has been a difficult thing over the past 18 months for those who find themselves in this situation.
Johnson told 6 News: âI think we’re going to pay off student loans as long as we pay off our mortgage. So if you have the wiggle room to go ahead and cancel, go ahead and do it. . “
And if you were to default on your student loans, it takes nine consecutive payments on time to get out. And that should have happened for most of the borrowing.
So now might be a great time to refinance and start paying off your loans again.