AGAWAM, Mass. (WWLP) – While the Supreme Court considers if President Biden’s plan for student loan forgiveness can move forward, the 45 million Americans who have federal student loans should prepare to start making payments again.
Those loans are supposed to kick in 60 days after the Supreme Court makes its decision but a local financial expert said now is the time to get your budget ready. With the pandemic, people have not needed to make payments for the past three years.
22News spoke with Martin Lynch at Cambridge Credit Counseling in Agawam. He said the federal government has new income-based plans you can sign up for that can make it more affordable. But if the increase in expenses has really made it difficult to factor in student loan payments, you can try temporarily going into a 30-year plan.
“You only do it with the thought that come January I’m going to switch to the new plan. It’s free to switch plans so that won’t be an issue and then you can continue making income-based payments,” Martin Lynch, Director of Education, at Cambridge Credit Counseling said.
It’s important to understand that used to trigger capitalization of unpaid interest. Which would mean you’d be paying interest on interest. The government is working to remove those triggers for student loan borrowers however some are enshrined in law.
Besides the 10-year nonprofit loan forgiveness program, there is also a 20 year that you can be eligible for even if you don’t work for a nonprofit.