September 28, 2021

Why Student Loan Borrowers Shouldn't Wait For Forgiveness

Forgiveness

Despite the pressure to cancel up to $50,000 of student debt, President Biden has decided to focus on targeted student loan cancellation. This lack of wide-scale student loan cancellation means that borrowers shouldn’t wait for forgiveness.

The U.S. Department of Education has provided debt relief to federal student loan borrowers by pausing their payments without incurring interest. The pause is set to end on January 31, 2022.

As a result, student loan borrowers can expect their monthly bills to resume soon. Taking the following steps can help you be prepared for repayment.

Know When Payments Are Due Again

With the extended pause ending in January 2022, borrowers can expect  their first payment to be due again sometime in February. This depends on the date they started paying their loans. The student loan relief has been extended many times during this pandemic, with last month being the most recent. According to the White House, this extension will be the final one.

Consider Your Payment Options

If you can’t afford to make payments in February 2022 due to unemployment or other financial hardship, there are options to consider. You can request for economic hardship or unemployment deferment. These can help you suspend your bills without accruing interest under them.

If you don’t qualify for both, you can continue postponing your payments by using a forbearance. But with this option, your interest and balance will add up once you resume paying.

Another option to consider is enrolling in an income-driven repayment plan. This program sets your monthly bills at an amount intended to be affordable based on your income and family size.

Review Your Payment Plans

Start deciding on the right payment plan that best fits your current financial situation. The standard repayment plan is 10 years if you can afford it.  A new provision was included in the $1.9 trillion COVID-19 stimulus package, such as the tax-free status for student loan forgiveness.

Under this provision, income-driven repayment plans may be more appealing as they come with lower monthly payments. Borrowers also don’t need to face a potentially large tax bill after 20 or 25 years of payments.

If you’re planning to change your repayment plan, it’s best to submit an application to your student loan servicer as soon as you can.

Other Steps to Take

While student loan forgiveness is still possible, here are other things you can do in the meantime to get ready for repayment.

  • Make sure that your servicer has your current contact information over the next four months. Notify them if you’ve moved location.
  • If you’re enrolled in automatic payments, inform your servicer regarding any changes in your banking information.
  • You may want to hold off on refinancing your student loans for a lower interest rate.
  • Set aside money in your budget for emergency savings and credit card debt. It’s best to keep it in a high-yield savings account.

Use Chipper for Lower Payments

Chipper can help you find a student loan repayment plan that actually fits into your budget. You simply fill out your information and link your student loan account for us to generate your options in seconds. We help the average student loan borrower save over $300 a month off their student loan monthly payment. Lowering your monthly payment plan can game changing for your personal finance and can be done in minutes! Sign up for Chipper today to get on track with your student loans.

Use Chipper for The Best Path to Forgiveness

Finding your path to student loan forgiveness is easier than ever before. Chipper helps members find better Income-Driven Repayment (IDR) plans every day. Once enrolled in an eligible repayment plan, we can help you explore your forgiveness options and understand your path towards forgiveness. Sign up with Chipper today and get on track with your student loans.

Use Chipper for Round-Ups

Paying off your student loans doesn’t have to be a long and painful journey. Round-Ups are a way to directly pay off your loans with your everyday spending! By tracking your linked spending account(s), we will calculate the rounded up amount from each transaction in a week (IE spending $4.28 would add $0.72 to the weekly amount). We then initiate a payment towards your student loan for the weekly amount. Get chipping away on your student loans with Chipper today.

Use Chipper for Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program was created to provide relief to borrowers aiding the public sector. Unfortunately, 30% of applicants are denied due to incorrect paperwork. We can help! Chipper was created to solve this issue by assisting borrowers in understanding their options as well as allowing forgiveness eligible users enroll into the best forgiveness program available. Sign up for Chipper today to see your student loan forgiveness options and get the forgiveness you deserve.

Use Chipper for Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness (TLF) program was created to enable teachers working in Title 1 schools to receive student loan forgiveness of up to $17,500 (depending on their teaching subject). Chipper has helped teachers from all over the country qualify for TLF program and can help you get the forgiveness you deserve today. Find out if you qualify for forgiveness in minutes with our employer search tool.

See How Much You Can Save with Round-Ups

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