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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
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At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Since March 2020, federal student loan payments have been on pause — with no payments required, no interest charged and all collections activities on hold. However, this period of administrative forbearance is , meaning all payments will resume on Jan. 1. The U.S. Department of Education has extended the payment pause multiple times. Previously, the forbearance period was set to end on Aug. 31, but in late August, President Biden announced his mass student loan forgiveness plan and extended the pause an additional four months. Payments resume on Jan 1 2023
Millions of borrowers are currently taking advantage of the administrative forbearance period initiated by the CARES Act in March 2020. Eligible loans include all federally held student loans, plus . With the forbearance period set to expire on Dec. 31, borrowers who have not been making payments need to prepare to resume paying their balances. The Department of Education has said that borrowers can expect information and resources about resuming payments leading up to this date and will receive a billing statement at least 21 days before the first payment is due. In the meantime, you can visit the and your to ensure that your contact details are up to date so that you’re informed when payments are set to resume. Why was the student loan payment pause extended
The payment pause has been extended a number of times, with the most recent extension announced in August 2022. In a , the administration made it clear a final extension is necessary to help borrowers still impacted by the pandemic. “While the economy continues to improve, COVID cases remain at an elevated level, and the President has made clear that pandemic-related relief should be phased out responsibly so that people do not suffer unnecessary financial harm,” the press release states. What to do if you can t afford student loans after payments resume
A from April 2022 found that 74 percent of U.S. adults with federal student loans predicted that an extension of the student loan forbearance period would have a positive impact on their finances. With these additional months to prepare for repayment, borrowers have more time to create a plan for their student loans and potentially explore more relief options. Loan forgiveness options
In addition to the forbearance extension, the Biden administration announced broad student loan forgiveness for federal student loans. Borrowers who make less than $125,000 a year and couples who file their taxes jointly and make less than $250,000 a year are eligible for up to $10,000 in federal loan forgiveness. Current and former Pell Grant recipients under those income thresholds can qualify an additional $10,000. The Education Department will be releasing a forgiveness application around October of this year. Borrowers working in certain occupations may also qualify for that forgive student loan balances after a number of years. For example, the (PSLF) program – which has loosened some of its eligibility requirements through – forgives loans for people in eligible public service jobs after 10 years of payments on an income-driven repayment plan. , on the other hand, requires five years of employment as a teacher in a high-need area in exchange for up to $17,500 in federal debt discharged. General forbearance
The current administrative forbearance period is automatically granted to all federal student loan borrowers. However, the federal government also offers outside of this emergency relief. You may qualify for up to 12 months of forbearance at a time (up to three years total) if you are unable to pay your loans due to financial difficulties, medical expenses or changes in employment. For more details, you can contact your loan servicer. Income-driven repayment plans
set your monthly payment based on a percentage of your discretionary income. Typically you’ll make between 20 and 25 years of eligible payments, and then the rest of your balance will be discharged. If your income is low enough, your payments could drop to $0. If you’re interested in applying, contact your loan servicer to see which plan best suits your needs. Refinancing
While will eliminate the options listed above, it could be a viable option if you took out your federal loan when interest rates were high and you still have a balance remaining after student loan forgiveness is complete. If you can find a low rate with a private lender, into a different rate or term once forbearance ends could help you lower your monthly payment. SHARE: Hanneh Bareham specializes in everything related to student loans and helping you finance your next educational endeavor. She aims to help others reach their collegiate and financial goals through making student loans easier to understand. Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans. Related Articles