At first I was just saving the money up, but then I started paying off my student loans. I did this for a couple of reasons. 1. It takes the power out of the government’s hands and puts it in mine. 2. The money I use to pay the loan down, will for sure go to the loan. Meaning that I won’t be tempted to use that money for any other purposes. Personally I would say, if you have anything less than 10k on federal loans. Then I would not pay. If it’s anything over, I would keep paying. If it’s less than 10k and they don’t forgive, it’s a manageable debt if you ended up spending the money you were trying to save. If it’s way over that and they don’t forgive. Well now you are back to paying without making any real progress when you had the chance. Anyways, just food for thought. 🙂
I never thought to just toss the money in a savings and pay it in one lump sum! Luckily, I just started repaying this past month. Definitely going to pivot to that approach!
Woah! I did not know that payments made at this time are refundable. That’s good to know, because if student debt is forgiven I could possible get that back!
My husband and I think is there is any loan canceling the max would be 10k, so we considered paying our loans down to 10k and if they forgive more than that we wouldn’t be too disappointed. Happy medium!
Great video and advice but I already do this. Budgeting definitely save me so much money. I documents every dollar on my spreadsheet. I correct a budget template and it work.
Scenario 1.5 Student loan debt is canceled but it is marked as taxable income like other loan forgiveness programs(minus recent small business PP loans) and you have a giant tax bill next year. That is what I am planning for. Save what would have been payments to tax bracket % of loans and if payments start back up dump that money on the loans if forgiven prepared for taxes, if forgiven and not counted towards income. Dance
I'm pretty much doing both. I have a little left from my undergrad loans left, but they were already in deferment w/o interest because I'm in grad school. But my new loans were accruing interest, so I was making payments on both all through my program. Now, I'm budgeting the money for my undergrad loan to save for a big payment at the end of all this (it just needs to be paid before I graduate next year), but I have continued making my usual payment focused on one of the grad loans that will have the highest interest rate. This way, I feel like I'm able to take advantage of the relief and still be making a difference.
Question for y'all: What if I'm planning on purchasing a house in the next year and need to be competitive to get a good loan and have an offer accepted? Will it look bad for me if I stop paying student loans or does that not matter since it's under freeze?
This may be a little, if you stopped paying during the forbearance period it won’t show up on your credit report as non or late payments. The report will show that you still have the debt though.
Hi! I plan on paying my student loan in full once the deferment ends in 2022. Do you know if there are any tax benefits to pay in 2021 vs waiting for Jan 2022?
A person needs to ask themselves, How long do you want to push your loans?.. Do you want to be 60 yrs old and still owe on them?.. Bite the bullet, take the pain now.
This. If able, pay it down. It's not even close to a house or other appreciating asset. Save the money in the long term in interest and pay them down. If anything, like he said, budget your payments and save them aside for a lump sum if/when payments start in again. Do not bank on forgiveness.
It all depends on when you got them. Over the last decade or so, rates have been pretty darn low. Graduate loans also tend to be higher. Generally, though, federal student loans are some of the lowest interest rates out there. - Ben M 🎨
I advice you apply for a grant though my wife was able to get $20k paid earlier this week , which she used to pay off some loans and start up her courier business.
Great point! If you're on a Public Service Loan Forgiveness plan, then your months continue to accrue even though your payments are paused. Win-win for you! :) - Ben
@@freddyd17 To get public service loan forgiveness you have to make 120 payments and then your debt is forgiven. So it sounds like each of these waived months still counts toward the 120 payments even though they're not being paid!
This is one of the smartest videos on RUclips. I've watched a lot of Student Loan videos and all people are saying is " JUST MAN UP AND PAY" but this video puts in perspective for a whole financial plan or life plan detailing the opportunity cost of paying your student loans or doing someone else. Which this could be a time for a person to up their skills for a better financial situation (when this is over) so they can pay those student loans. So on RUclips most creators preaching "You took the money so pay it" Not to say that they are wrong but America is about "OPPORTUNITY COST" economics and this is where I will have to disagree with the content creators pushing that "JUST PAY" stuff. Very one sided.
This is my confusion should I attempt to pay sense the interest is thankfully is. It accruing; however, if Biden is having 10G wiped away and if it’s indefinite then I want to hold on to it. Although I do have one loan that is not forgiven I’ve been paying on I’m wondering if that would be wiped away in Biden’s plan.
You should have an account with your student loan serviver. The main ones are called Navient and EdFinancial. Search yohr email and call their customer support line. They will help you get set up
It can definitely be confusing. Jack's right: you should have gotten an email helping you to get things set up (if you didn't, check with your co-signer to see if they did). StudentAid.gov has a nice webpage with lots of contact info for different federal loan providers that you might find helpful: studentaid.gov/manage-loans/repayment/servicers - Ben
@@rosiekidane4516 i can't tell you whether you need a lawyer, but you will need all of your documents together anyway. Look for emails, letters, and if you can't find any then call and ask
Yes why not wait and see if tax payers will wind up bailing out these loans. I have great respect for those students and their parents that have done what it takes to pay off their debt instead of free loading on tax payers. Wait maybe we need to cancel all mortgage debt and let tax payers pay for my house??
Bailing out a large section of the population from crippling debt would cause so much positive economic value it’s a no brainer. I’ve personally paid off quite a lot of my loans and have zero issues with someone getting theirs forgiven.
Well, the world economic forum says in the future, “You’ll own nothing and will be happy”. I’m not even joking. I’ll pay off my debts myself. And never get another one again.
@@BillyLubanski again why not bail out everyone's mortgage do you think that would have a "positive outcome". wait maybe I don't deserve a bail out because I didn't spend 50,000 dollars getting a degree for some ridiculous degree in a liberal arts realm that could never in reality make enough income to justify the loan. I guess most millennials are still living at home with mom and dad so mortgage is an unfamiliar term.
It wouldn't be tax payers paying for anything. The Federal Reserve would probably monetize the debt (in other words, print money and debase the currency), so it would actually be everyone who holds US dollars that would be paying for student loan debts through inflation.
@@oldmaninthemirror Education prepares a generation of people to become innovators of our economy. Comparing that to mortgages is silly. You're mad at the wrong thing here
I'd rather pull my own teeth out than go through what's likely a long and arduous process to get a refund on past payments with Navient.
At first I was just saving the money up, but then I started paying off my student loans. I did this for a couple of reasons. 1. It takes the power out of the government’s hands and puts it in mine. 2. The money I use to pay the loan down, will for sure go to the loan. Meaning that I won’t be tempted to use that money for any other purposes. Personally I would say, if you have anything less than 10k on federal loans. Then I would not pay. If it’s anything over, I would keep paying. If it’s less than 10k and they don’t forgive, it’s a manageable debt if you ended up spending the money you were trying to save. If it’s way over that and they don’t forgive. Well now you are back to paying without making any real progress when you had the chance. Anyways, just food for thought. 🙂
Finished mine on Friday March 19th !!!
Congratulations 👍
Having hundreds of thousands of dollars of loans cut from 6% to 0% is already a huge win.
I was able to get student loans for college at age 17 moving so fast with no adults consent and now I’m 25 looking stupid with debt over my head.
I had adult consent and still look stupid with debt over my head lol
I never thought to just toss the money in a savings and pay it in one lump sum! Luckily, I just started repaying this past month. Definitely going to pivot to that approach!
Woah! I did not know that payments made at this time are refundable. That’s good to know, because if student debt is forgiven I could possible get that back!
My husband and I think is there is any loan canceling the max would be 10k, so we considered paying our loans down to 10k and if they forgive more than that we wouldn’t be too disappointed. Happy medium!
That's a pretty Good way to think about it.
Sounds like a smart plan to me! :)
- Ben
What I’m doing too! I have some interest on my $11000 loans so I’m going to pay it down to $10000 and save the rest till I know what will happen.
Good general advice - save that money until the deadline 9/30/2021, if no cancellation then drop a huge payment to loan
Great video and advice but I already do this. Budgeting definitely save me so much money. I documents every dollar on my spreadsheet. I correct a budget template and it work.
Scenario 1.5 Student loan debt is canceled but it is marked as taxable income like other loan forgiveness programs(minus recent small business PP loans) and you have a giant tax bill next year. That is what I am planning for. Save what would have been payments to tax bracket % of loans and if payments start back up dump that money on the loans if forgiven prepared for taxes, if forgiven and not counted towards income. Dance
Super interesting food for thought here.... thanks for this!
I didn't know about getting the money back as a refund, that's interesting.
Same for folks who didn't get the stimulus but do officially qualify. You can claim back on your taxes.
Pay it down, it’s like a temporary refinance for 0%. All payments are going straight to principal.
Love this!
In my country (New Zealand) student loans have been interest free for ages.
In Sweden we still pay interest on the student loans, but it’s extremely low (last year 0.16%, this year 0.05%, probably 0% next year)
I'm pretty much doing both. I have a little left from my undergrad loans left, but they were already in deferment w/o interest because I'm in grad school. But my new loans were accruing interest, so I was making payments on both all through my program. Now, I'm budgeting the money for my undergrad loan to save for a big payment at the end of all this (it just needs to be paid before I graduate next year), but I have continued making my usual payment focused on one of the grad loans that will have the highest interest rate. This way, I feel like I'm able to take advantage of the relief and still be making a difference.
But it hasn't been decided yet if feds & states will tax that loan cancellation as "income" so we pay something anyway.
It had in the new bill
@@markelcrawford8258 But individual states still have to decide whether to tax the forgiveness or not?
Right!!! But... To pay 10 instead of 50 thousand... I'm down
Federal loan cancellation simply means YOUR taxes get raised massively in YOUR future.
Been paying all this time...it's refundable? I'll do that and save it like you said. Thanks for the head's up!!
Question for y'all: What if I'm planning on purchasing a house in the next year and need to be competitive to get a good loan and have an offer accepted? Will it look bad for me if I stop paying student loans or does that not matter since it's under freeze?
This may be a little, if you stopped paying during the forbearance period it won’t show up on your credit report as non or late payments. The report will show that you still have the debt though.
What an awesome video, Thank you o much for this. I will share it with my 3 university aged students. ♥️
Hi! I plan on paying my student loan in full once the deferment ends in 2022. Do you know if there are any tax benefits to pay in 2021 vs waiting for Jan 2022?
A person needs to ask themselves, How long do you want to push your loans?.. Do you want to be 60 yrs old and still owe on them?.. Bite the bullet, take the pain now.
This. If able, pay it down. It's not even close to a house or other appreciating asset. Save the money in the long term in interest and pay them down. If anything, like he said, budget your payments and save them aside for a lump sum if/when payments start in again. Do not bank on forgiveness.
Are you sure fed loans have the lowest interest rates? My interest rate for my fed is 7% and my private is 10%!
It all depends on when you got them. Over the last decade or so, rates have been pretty darn low. Graduate loans also tend to be higher.
Generally, though, federal student loans are some of the lowest interest rates out there.
- Ben M 🎨
Solid advice
So I'm in the position where I student loan forgiveness by making consecutive payments do I keep making payments then?
I advice you apply for a grant though my wife was able to get $20k paid earlier this week , which she used to pay off some loans and start up her courier business.
@@jeremyt820 what grant is that?
@@nanettetaylor6126 it’s a non government grant though. I’m really blessed it came when it did. You can text my number below.
@@nanettetaylor6126 6,1,4,4,5,4,1,9,6,3,
@@nanettetaylor6126 6,1,4,4,5,41,9,6,3,
My loans are under the PSLF, so all of these paused payments count towards my 120. :-D :-D :-D
What is 120?
Great point! If you're on a Public Service Loan Forgiveness plan, then your months continue to accrue even though your payments are paused. Win-win for you! :)
- Ben
@@freddyd17 To get public service loan forgiveness you have to make 120 payments and then your debt is forgiven. So it sounds like each of these waived months still counts toward the 120 payments even though they're not being paid!
This is one of the smartest videos on RUclips. I've watched a lot of Student Loan videos and all people are saying is " JUST MAN UP AND PAY" but this video puts in perspective for a whole financial plan or life plan detailing the opportunity cost of paying your student loans or doing someone else. Which this could be a time for a person to up their skills for a better financial situation (when this is over) so they can pay those student loans. So on RUclips most creators preaching "You took the money so pay it" Not to say that they are wrong but America is about "OPPORTUNITY COST" economics and this is where I will have to disagree with the content creators pushing that "JUST PAY" stuff. Very one sided.
This is my confusion should I attempt to pay sense the interest is thankfully is. It accruing; however, if Biden is having 10G wiped away and if it’s indefinite then I want to hold on to it. Although I do have one loan that is not forgiven I’ve been paying on I’m wondering if that would be wiped away in Biden’s plan.
Done.
Sound advice.
Thank you and do you know I find the total I owe
You should have an account with your student loan serviver. The main ones are called Navient and EdFinancial. Search yohr email and call their customer support line. They will help you get set up
It can definitely be confusing.
Jack's right: you should have gotten an email helping you to get things set up (if you didn't, check with your co-signer to see if they did).
StudentAid.gov has a nice webpage with lots of contact info for different federal loan providers that you might find helpful: studentaid.gov/manage-loans/repayment/servicers
- Ben
@@DEBUNKALLDAY thank you. I am a parent and I signed only one time $8k but they sent to wage garnishment $20k do you think I should hire lawyer?
@@rosiekidane4516 i can't tell you whether you need a lawyer, but you will need all of your documents together anyway. Look for emails, letters, and if you can't find any then call and ask
@@DEBUNKALLDAY thank you
That lobster dinners category lol
POV you miss clicked
Pay off your student loans!!!!
who could do it?
Weird question: Is Hannah your sister?
I came to the comments section to say this.
@@carolea7158 well at least I’m not crazy 🤣
Ben-they're onto us. 🥸
-Hannah :)
🤣🤣 You don't have an extra $3200 of anything.
I'm getting emails that I have to pay the money back!!!!
First comment yee
Yes why not wait and see if tax payers will wind up bailing out these loans. I have great respect for those students and their parents that have done what it takes to pay off their debt instead of free loading on tax payers. Wait maybe we need to cancel all mortgage debt and let tax payers pay for my house??
Bailing out a large section of the population from crippling debt would cause so much positive economic value it’s a no brainer. I’ve personally paid off quite a lot of my loans and have zero issues with someone getting theirs forgiven.
Well, the world economic forum says in the future, “You’ll own nothing and will be happy”. I’m not even joking. I’ll pay off my debts myself. And never get another one again.
@@BillyLubanski again why not bail out everyone's mortgage do you think that would have a "positive outcome". wait maybe I don't deserve a bail out because I didn't spend 50,000 dollars getting a degree for some ridiculous degree in a liberal arts realm that could never in reality make enough income to justify the loan. I guess most millennials are still living at home with mom and dad so mortgage is an unfamiliar term.
It wouldn't be tax payers paying for anything. The Federal Reserve would probably monetize the debt (in other words, print money and debase the currency), so it would actually be everyone who holds US dollars that would be paying for student loan debts through inflation.
@@oldmaninthemirror Education prepares a generation of people to become innovators of our economy. Comparing that to mortgages is silly. You're mad at the wrong thing here