Student Loan Relief Continues Until January 31, 2022
Recent Updates on Student Loans
The Education Department said that it would uphold the moratorium, which the administration first extended earlier this year and suspends loan payments, interest accrual, and collections on defaulted loans. The pause was set to expire at the end of September 2021-it is now extended through early next year until January 31, 2022. It only applies to federal student loans.
Mr. Biden has instead called on Congress to pass legislation to forgive $10,000 in individual student loans, which will most likely prove difficult due to lack of Republican support. Officials have questioned whether Mr. Biden had the authority to cancel debt via executive action and that administration lawyers were looking into this matter.
Is Refinancing Student Loans Right Now a Good Idea?
We have a lot of our clients question if they should help refinance their children’s student loans with lower interest rates in the market these days. Normally we would say “yes” however, says borrowers shouldn’t take any steps that assume their student loans will be forgiven. But they also shouldn’t take any steps that would preclude them from qualifying for forgiveness.
For example, if you have federal loans, think twice about refinancing them into private loans. “There’s a good chance private loans won’t be eligible for forgiveness if it happens.
How Does One Determine if Getting A Graduate Degress Will Have a Positive Payoff?
There has been a lot of press recently about the value of graduate degrees that tend to be very expensive and young adults have taken out a lot of debt to get medical and law degrees amongst others, hoping that their future income will make it worth it.
The returns to a graduate degree are highly variable. For example, the Wharton School’s two-year executive M.B.A. program costs $210,900, but more than 90% of graduates receive full-time offers, and their average salary is around $150,000. The average student who took out federal student loans for a master’s in film at Columbia University, by contrast, owed $181,000 and, two years after graduating, half of them have a salary of less than $30,000.
Before applying to a graduate program, it’s worth thinking carefully about the payoff. To attain knowledge is admirable, but not if it hurts you financially.
Worse, debt-ridden young people cannot easily afford to have children. The years we expect them to pay their student loans are the very years they would otherwise be supporting families.