There is a student loan debt crisis in the United States. As of the third quarter of 2023, Americans hold more than $1.6 trillion in outstanding student loan debt.
The situation is only worsening for students and recent graduates. During the Covid-19 pandemic, the federal government paused student loan payments to provide relief. However, the Biden Administration recently announced that student loan payments are resuming.
The good news is that there are programs to help with Florida student loans. Read on to learn how to deal with your student loans. Explore essential topics such as student loan refinancing and loan forgiveness programs.
How to Reduce Your Monthly Student Loan Payment?
Refinancing your student loans is the most effective way to reduce monthly payments. This can be accomplished by changing one or two variables in your loan agreement.
Securing a lower interest rate is one way to reduce monthly payments. Each month, your payment is broken down between principal and financing.
The financing portion varies based on the interest rate and your remaining balance. Lower interest rates result in fewer financing charges.
Extending the loan term is another option. This spreads payments over an extended period, effectively lowering your payment.
So, you’ve decided to refinance your loan. Did you know that means you essentially take out a new one?
This new loan pays off your existing balance under the old terms. Now, you have a new loan with more favorable terms, like a lower interest rate or longer repayment duration.
Is Loan Forgiveness an Option for You?
Loan forgiveness programs are another way to eliminate student loan debt. There are several different programs out there.
Over the past several years, the Biden Administration has unsuccessfully attempted to forgive public student loans. The President wanted to waive up to $20,000 in federal student loans. However, the U.S. Supreme Court ruled his plan unconstitutional, and the program is now in limbo.
There are other loan forgiveness programs to apply to. For example, there is an approved forgiveness program for public service employees. This includes federal employees, teachers, police officers, and nurses.
Student Loan Repayment Plans Explained
Many borrowers opt for a fixed payment schedule over the loan term. However, other repayment plans offer some flexibility.
For instance, you can try an income-based repayment plan. Here, your monthly payment correlates to the amount of income you bring in.
After graduation, your payments will be cheaper. This affords you time to go find a job and start earning an entry-level salary. As time goes on and you make more money, monthly payments increase so that you can pay down the debt faster at the backend.
Your Guide to Student Loans in Clearwater, FL
You are now ready to start tackling student loan debt. There are options available to borrowers.
The government is actively trying to help people through forgiveness programs and income-based repayment plans. Refinancing is also an option, but you may have to extend the loan term.
If you are interested in taking out Florida student loans, contact us today to speak with a specialist at FiCare Federal Credit Union.