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Should you keep paying during student-loan freeze? Experts weigh in


“Not a single person in this country has paid a dime on federal student loans since the president took office,” former White House press secretary Jen Psaki said in a recent press briefing, referring to the suspension of interest on the debt.

In reality, some borrowers (like Lea Ceasrine at 28) have continued to make their monthly payments.

This 30-month moratorium provided them with a rare chance to advance their loans and not pay interest.

Ceasrine borrowed a mixture of federal and private student loans initially to help pay her bachelor’s degree and graduate with an outstanding balance close to $70,000.

Ceasrine stated that she made it her goal during the pandemic to repay my first loan. The Chicago-based podcast producer did not only focus on student debt but also increased her monthly payments. 

In the two last years she has reduced her outstanding balance by $54,000.

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Only 1.2% of borrowers made their monthly payments on time and paid down the loan amounts. extended student-loan freezeMark Kantrowitz is the student loan expert and he derived these numbers from repayment data provided by the U.S. Department of Education. 

Kantrowitz stated that the outlays also contributed to the 120-payment threshold for public service loan forgiveness. He noted, “effectively, reducing the qualifying payments count by a quarter.”   

Talk of, however, now massive student loan forgiveness is back on the table leaving these borrowers questioning whether further payments make financial sense.

Ceasrine stated that she has only just stopped paying for it. Debate about student loan forgiveness heated up.

According to her, she was paying $1,300 each month and wasn’t saving anything in order make the highest possible payment. I can’t sustain that.”

Ceasrine also said that she is hopeful there will be legislation that partially compensates for the system that has largely failed her.

Ceasrine explained that the precarious position of students is necessary since we’re still at the lowest end of the ladder in terms economics and are not able to move up.

She explained that she went to college as a student without any financial aid. “I borrowed my first loan for college at 17. It was not worth it.”

I didn’t have enough to repay it after graduating.

Although President Joe Biden was expressed skepticism about sweeping student loan forgiveness in the past, he recently indicated he may, in fact, provide some form of student debt cancellation, according to multiple reports.

“It really does shift the onus on the presidentTo make his plans clear sooner rather than later,” said Whitney Barkley-Denney, a senior policy counsel at the Center for Responsible Lending.

Barkley Denney explained that “there’s a deadline here.” People need to plan how they will handle their loan debt moving forward.

Do you think it is time to end making payments?

Brian Leslie from Edelman Financial Engines, director of financial planning, stated: “I wouldn’t recommend paying federal student loan at this stage.” 

We don’t know if we’ll ever be able to forgive student loans, but right now it’s almost nothing.

Leslie stated that discipline is essential.

You shouldn’t be spending money that could have gone towards student loans for new jet skis. 

He suggested that the money be put towards savings, or used to pay off other outstanding loans.

“If an employer retires and you don’t contribute enough to the match, I wouldn’t hesitate to go there with these dollars.” 

You can also set aside money for emergencies. high-yield savings account. Leslie explained that “if we reach a point when forbearance is impossible, then we can take out the money you have accumulated and use it to pay off student loans.”      

The chances of loan forgiveness are still slim, says Laurence KotlikoffBoston University professor of economics and author of the book “Money Magic.”  

He stated that the president does not have unilateral authority to cancel student loans. “He cannot just wave a magic sword.”

Kotlikoff says that Congress has to pass student loan forgiveness legislation. With only 60 votes, Kotlikoff states, “I don’t think there is a way for student loans to be cancelled unless someone knows something I don’t.”

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