Tips for Navigating the Student Loan Payment Pause

Hicks said while it’s nice to have thousands of extra dollars to save or spend on other necessary expenses, it might be worth continuing to pay off those loans.

“On the other hand, the people who can take advantage of this and pay off this debt now at zero interest, it will really benefit them in the long run,” he said.

Hicks said the average student debt is close to $28,000 and the average federal student loan rate is 4.1%.

“You’re going to pay for the life of this loan, about $35,000 for that $28,000 balance, because about $6,400 will be consumed with interest,” Hicks said. “So if you made payments, let’s just say you made payments in the last two years and you continued to make those payments, you would have saved about $2,500 in interest. So you almost have reduces this interest by half.”

Hicks also said interest rates are now rising, so new student loan debt will likely be higher than what previous borrowers had to pay.

“Some people just wish and hope that all student loan debt will indeed be forgiven. That’s one of the things that President Biden has said and said could happen,” Hicks said.

On Wednesday, Rep. Melanie Stansbury tweeted that while another break is significant progress, it’s not the end.

The Stansbury office also sent KOB 4 the following statement:

“Far too many New Mexicans are struggling with crippling student debt, forcing them to put their dreams and opportunities on hold. New Mexico is leading the country, under Governor Lujan Grisham and our legislature, by making free college for all This week-long federal pause on student loan repayments is a step in the right direction, but we need to cancel student debt and expand free college across the country. good for our people, good for our economy and good for our country.

Source link

Elaine R. Knight