Will my student loans be canceled? I owe $ 48,000 with interest.
Q. I have a student loan. It was $ 30,000 and now it’s $ 48,000 with interest. I am not able to reimburse at all. I tried, but my little income goes towards my mortgage and my bills. What to do? Will President Biden forgive any of these loans?
– In trouble
A. We know that student loans are a burden on millions of Americans.
You have options.
First, the government offers a number of income-based repayment plans, said Claudia Mott, certified financial planner at Epona Financial Solutions in Basking Ridge.
You can read up on them to see if any of the options will be affordable, she said.
Start at studentaid.gov or call (800) 433-3243 to discuss your specific situation and whether you qualify for an income-based payment plan, she said.
“You can also discuss the concepts of postponement or additional forbearance at the same time,” she said. “The government’s COVID forbearance program officially ends on January 21, 2022. At that point, interest rates will return to their previous levels and payments will be due as scheduled.”
You asked if the Biden administration could cancel certain loans.
Mott said that for now, the administration enforces existing rules regarding people with disabilities, soldiers deployed overseas and those who have been defrauded by for-profit schools.
âAlmost $ 10 billion in debt has been written off since the president took office,â Mott said.
Wider plans are being discussed on Capitol Hill for additional loan cancellations ranging from $ 10,000 – the number backed by the president – to $ 50,000, she said.
But as of yet, there is no clear indication of a timeline for putting this forgiveness in place, should it happen.
âYour best course of action would be to come up with a payment plan and do your best to stick to it,â Mott said. âIf you stop making all payments and the loans are in arrears, it will have a serious impact on your credit score and your ability to borrow in the future. “
Email your questions to [email protected].
Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘s weekly electronic newsletter.