Report after report has shown that majority Black- and Latinx-communities to bear the greatest burden of student debt and its effects. In 2015, the CFPB documented the effects of the Great Recession on student debt in communities of color, “with many families seeing their net worth nearly cut in half.”
Oftentimes, we and our clients have to correct mistakes made by loan servicers, and having your payment plan messed with can be one of the most detrimental. If your loan servicer tells you that you no longer qualify for your plan, they’re wrong. When you enroll in an IDR plan, it’s “‘til death do you part,” or—to put it in a more positive light—“‘til PSLF do you part.” Have no fear, give us a call, and we’ll help you ride the cap all the way there.
For those pursuing PSLF, they’ve had the added benefit that these months of forbearance have counted toward their 120 qualifying payments required for forgiveness. The economy, however, remains fragile, and many are wondering what will happen as student payments resume in the coming months—not to mention the end of expanded unemployment benefits for millions of Americans.
So what’s the solution? Where do we go from here?
Studies have shown a strong correlation between debt and anxiety, especially student debt. Greater debt tends to be reflected in a greater amount of anxiety, which hits folks like physicians—who already have high-stress, demanding jobs—especially hard. Couple that with the added catastrophic strain of a pandemic on healthcare professionals and you’ve got a one-two punch to your mental health.
So what’s the solution? Where do we go from here?
When Congress passed the CARES Act in 2020, it placed all federally-owned student loans in forbearance, freezing all payments, interest accrual, and income recertifications. That means if you have Direct, Perkins, PLUS, FFEL, or HEAL loans owned by the Dept. of Education, they’re on hold until the end of September 2021. Any privately-held loans, unfortunately, do not count.
When Congress passed the CARES Act in 2020, it placed all federally-owned student loans in forbearance, freezing all payments, interest accrual, and income recertifications. That means if you have Direct, Perkins, PLUS, FFEL, or HEAL loans owned by the Dept. of Education, they’re on hold until the end of September 2021. Any privately-held loans, unfortunately, do not count.
When Congress passed the CARES Act in 2020, it placed all federally-owned student loans in forbearance, freezing all payments, interest accrual, and income recertifications. That means if you have Direct, Perkins, PLUS, FFEL, or HEAL loans owned by the Dept. of Education, they’re on hold until the end of September 2021. Any privately-held loans, unfortunately, do not count.
If you have student loans and are on an IDR plan, you can likely benefit from the extension. Studentaid.gov says,
“You will not have to recertify your income before the end of the COVID-19 emergency relief period, regardless of whether your recertification date would have happened prior to the end of the relief period. As part of the payment suspension, your recertification date has been pushed out from your original recertification date. You will be notified of your new recertification date before it is time to recertify.”
Join us June 7, 14, 21 & 28 as Joy and Ryan navigate the muddy waters of student debt and how you can “flip the script on student debt.”
If you’re in repayment, it’s likely you have some special forms your loan servicer requires. Unless you’re on the standard 10-year repayment plan, you need to submit an income recertification annually for your income-driven repayment (IDR).
For those pursuing Public Service Loan Forgiveness (PSLF), you should also be submitting an employer certification form as well so you can track your progress.