Don’t wait for the government to write off student loan debt

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RICHMOND, Virginia – Despite a recent expansion in student loan relief, experts suggest borrowers should start preparing now for the start of repayments.

“The best thing you can do right now is make a plan for your repayment,” said Andrew Pentis, who works with LendingTree. “It is possible that this moratorium will be extended by the Biden administration or the newly elected Congress. But Biden takes office on January 20 and the current moratorium is expected to end on January 31. More than two weeks for a decision to be made. on the extension of the moratorium. “

Pentis said that since March millions of student loan borrowers have benefited from administrative forbearance, which suspended payments and interest and halted collection of all overdue student loans.

He said borrowers with federal student loans held by the government did not incur penalties during the moratorium.

“If you have a qualifying federal student loan and see any of these negative impacts, such as your credit score, credit report, and delinquent account being affected, it is best to contact your federal loan officers. “said Pentis.

For borrowers who are struggling to pay, Pentis suggested signing up for an income-based repayment plan to reduce monthly payments.

“You can also suspend your payments via postponement for unemployment or other reasons of economic hardship,” he said.

He said hoping the government will simply write off the more than $ 1 trillion in student loan debt is not a good option.

“There are billions of dollars in private student loans and student loans that are no longer in the hands of the federal government,” he said. “So even if the two main political parties get together and decide that this is what they want to do, it is unlikely that we will see more than a trillion dollars actually disappear.”

While Pentis says it is best to plan to restart payments in late January, reports surfaced Thursday that Congress is close to reaching agreement on more COVID-19 stimulus measures that could include more student loan relief.

This story was originally posted by Shelby Brown on WTVR in Richmond, Virginia.

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