Written by Lauren James Budhu
For new college freshmen, preparing for the next four years of your life should be such an exciting time. Of course, picking your major, scheduling classes, scouring big box stores for your dorm essentials and prepping for your big move on campus are some of the most fun pieces of the collegiate puzzle. However, then you are left with the most unpleasant piece: how do you pay for college’s hefty price tag?
While some may be granted a scholarship, have help from parents or a relative, or can dig into their pockets, many prospective students end up relying on student loans, resulting in massive loan debt for years post-college and long into careers.
This has become a significant problem in society today.
According to Forbes.com, the costs of college have increased dramatically over the last 30 years, with tuition growing from $4,160 to $10,740 at four-year public colleges and from $19,360 to $38,070 at four-year private colleges. With these increases, the need for student loans has heightened to new levels. Today, more than half of all university students leave school with debt.
Forbes.com notes that there is currently $1.75 trillion worth of student loan debt nationally (composed of both federal and private loans), with more than $28,950 owed per borrower on average. Luckily, students have been able to hold off on paying their student loans back for close to three years during the pandemic. However, that time is quickly coming to end; interest rates will start accruing on federal student loans again in September.
For years, borrowers were holding out hope that President Joe Biden would discharge a portion of student debt. Yet this summer, the Supreme Court unfortunately struck down his plan to eliminate more than $20,000 in loans per person. Further, a federal appeals court recently halted new regulations designed to make it easier for borrowers defrauded by their school (like these schools) to receive student loan forgiveness. The program, Borrowers Defense to Repayment, offers federal student debt relief to those who enrolled in programs through misrepresentation or lies about key aspects such as career prospects, earnings potential, etc. While it’s not the final straw, if the new regulations are ultimately struck down, the Borrower Defense program would remain intact. However, new applications would not be reviewed under the new regulations. Instead, they would be subject to the prior set of regulations that were established under the Trump Administration.
Regardless of what happens on the national scale, if you’re in need to help with paying off your student loans, it’s important to start with your student loan servicer, which is assigned to you by the federal government or private lenders when you initially receive your loans. They should be your first point of contact. You can find your federal student loan servicer by logging into your My Federal Student Aid account. For private loans, ask the original lender whom to contact for billing or repayment inquiries. This way, you can:
● Lower student loan payments
● Pay less temporarily
● Pursue debt cancellation or forgiveness programs that you might qualify for
If you’re nervous about contacting your lending service or if you need additional student loan help, you can get a personalized plan of action from a nonprofit credit counselor or a nonprofit organization that advises on student loans. Search for a counselor trained by a respected organization such as the National Foundation for Credit Counseling.
You could also pay to work with a traditional financial planner! Look for one who is a Certified Student Loan Professional to help ensure they understand all the ins and outs of student loans. Get a rundown of more loan resources and everything you need to know here.
Want to help in other ways? Consider these nonprofits that help repay student loans.
