TEMPLE, Texas — With a new Congress and the Mid-term election behind us, it appears that student loan forgiveness for most Americans is going to be dead in the water.
So where do we go from here? Should you resume those payments even though the government has put a halt on payments due until the end of June while the courts decide your debts fate?
This March it will mark 3 years since the government has made money off of interest on student loan debt. If you have a government backed loan, you have not been required to pay. And if you have been paying, you've probably made a nice dent in your principle and eliminated all of your interest.
So, the question is, should you keep paying or wait for government relief?
Rolandus Johnson told 6 News, "The government hasn't made a dime off of them in, what, the last 2 years. And so, what I’ve found is this is just kind of my experience here over the past 2 years or so, people who continue to pay, they are in a great place. When they start resuming the interest and all of those sort of different things requiring payments I don't know, they've been pretty quiet on that. But the people who are continuing to pay are seeing really good head wind and their balance dropping and so that's kind of what we tell them we say hey, if debt is a big thing as part of your financial plan even though the government says you don't have to try and pay it, if you don't it's going to hit you like a ton of bricks."
The proposal from the Biden administration was to forgive 10-thousand in student loan debt. So what if you owe less than 10 large, at this point do you wait or keep paying?
Rojo told us, "Yeah and that's a huge gamble and I don't want to get too political here but if you start depending on an outside entity, or are depending on someone to give you something and you can not put all of your eggs in one basket and I think that's with anything in life so I think that taking care of yourself first by paying those things down and going ahead and knocking them out I mean $9,000 depending on what your lifestyle is and your career you can knock that out in a year or two years and then know you're completely free from student loan debt."
So, we wanted to ask Rojo, with interest rates rising and a hold still on interest from the government, it seems like refinancing your loans at this time would not be wise.
He told 6 News, "If you have the ability to pay as much as you can, I wouldn't go for any refinances or anything right now because you never know who that's going to effect you down the road. But as of right now, and I know that in the financial planning world we don't, we try to stay away from living right now we try and think about 10 or 15 years in the future, but right now is a really great time to try and make a lot of headway in taking care of those student loans."
And just a reminder private student loans issued by lenders like banks never took a hiatus and need to continue to be paid. And they did not qualify for forgiveness under the Biden plan.
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