I’m so anxious about my student loans, why I don’t know. In the three year period when loans were on pause, I continued to pay, never missing a month and paid off two.
Now that interest has resumed I’m freaking out. I have checked my balance, the interest rates daily and it’s given me pure anxiety. I pray I don’t end up with another inflated loan.
It really sucks because once interest starts accruing it’s difficult to pay down the principal. I’m thankful that I was able to get my balance down, but I’m nervous it’s going to balloon out of control with the interest.
September 7th, 2023 at 01:23 am 1694046199
Under the new program, as long as you make the payment each month, the loan will not balloon like what happened before.
Payment is based on 10% of your income after an allowance for living expenses is subtracted. For single people, the allowance is $32,800 per year. (The amount is higher for families based on family size)
Some people will owe nothing until their income rises.you of course owe because your income is much higher!
No matter what, if you pay what you owe, you get credit for having paid that month. Even if you owed nothing.
If the amount you owe doesn’t cover the interest due on the loan (yours will) the excess interest is immediately forgiven.
I know that before it was added to the loan balance, but that cannot happen now.
After 20 years of payments (10 if your original loan was less than $12,000) your loan balance is forgiven.
The 30 months of the pandemic count towards the 20/10 years (or the months since you graduated/left school in 2020-2023)
Next July, for undergraduate loans the percent due drops to 5%. I think you have graduate loans - they stay at 10%.
No one’s balance will go above what they owe now unless they fail to pay what they owe each month.
For people whose loans are forgiven after 2025, there could be income taxes due. Democrats would like to change that but that’s a political discussion. If not changed, the amount due in taxes would be 10-25% of the loan balance.
Of course, a political change could wipe this out so working to pay down your loan is good, but there is no need to be afraid.
I asked you what your loan forgiveness date is because if your loans are near forgiveness, it doesn’t make sense to pay extra on them. You can absolutely do math via a spreadsheet to calculate the impact of extra payments on total interest paid and payoff date.
The exploitation of student loan borrowers is over, at least for now.
Arm yourself with the facts and the numbers!
You are ok.
September 7th, 2023 at 02:51 am 1694051466
I have about 10 years left to make payments before I’m eligible for forgiveness and I was shy of the 10 year mark at a nonprofit.
September 8th, 2023 at 12:47 am 1694130459