The federal government suspended required payments till the end of the year for federal student loans. Read about it here.
This is good news if you are having difficulty making your payment. HOWEVER, if you are able to make your payments, consider doing so for this reason:
You will reduce the cost of the loan over the long term.
Here is why, typically when you make a loan payment, a portion of your money goes towards the interest on the loan, and a portion to reduce the principal. The interest is the cost you pay to borrow the money and the principal is the actual amount you borrowed.
Paying down your loan during this time of administrative forbearance will result in MORE of your payment going towards reducing the principal resulting in you paying off the loan sooner.
BUT less than 11% of federal student loan borrowers are taking advantage of this benefit.
If you want to take advantage of this benefit you will need to take action to make the payments as the loans were automatically placed in forbearance.
Don’t you want to be like Dee-1 and pay off Sallie Mae? Check out Erik’s conversation with Dee-1 as he talks about his struggles paying off his student debt and how his success in the music industry changed his life forever.
Do you need help making a plan to pay off your student loans? We can help. Start planning now.