To pay or not to pay: take advantage of the moratorium on student loans
Thousands of students have again been released from their monthly student loan payments, and these loans will not bear interest until September 2021.
In Ohio, the average borrower owes $ 33,000 in student loans. That’s according to Andrew Pentis, a certified student loan counselor and a senior writer for Student Loan Hero.
A loan of this size would represent monthly payments of $ 300 to $ 500 for the average graduate.
Since President Joe Biden extended the moratorium on student loans, freezing them with no accrued interest and no minimum payment required, a burden has been lifted on many graduates.
For those who are facing unemployment, this money can be used for needs such as monthly bills. But once those are covered, Pentis says students should seriously think about how best to use that money.
“If you are suddenly able to put this [loan] in the rearview mirror, at least for a little while, you can hopefully spend those savings on higher priority personal financial goals, ”Pentis said. Priority financial objectives such as, for example, an emergency fund.
If your bills are paid and you feel financially prepared for an emergency, Pentis says other debt like credit cards come next.
“You can tackle higher interest rate debts like credit cards… kind of the time to make sure your finances are in order… once you are able to. overcome all these personal financial challenges, then it pays to return to your federal government. student loans and come up with a strategy for those, ”Pentis said.
The moratorium is also an advantage for those who continue to make voluntary payments on their loans.
“Take a holistic look at your personal financial situation,” Pentis said. Major debt, so by the end of this moratorium in the fall, your balance will have gone down. ”
Federal student loan borrowers can ask their loan officers about their repayment options.
For those who need a little extra help, during the pandemic, Pentis is offering its student loan advisory services free.