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Unless President Joe Biden extends it again, the federal student loan payment break will end on August 31. When the break ends, the federal government student loan borrowers will have to start repaying their loans, interest will resume, and collections will likely resume on defaulted loans.
To help you prepare for when your payments resume, here are some options you can follow, including eligibility for student loan forgiveness or refinance your loans.
By visiting Credible, you can learn more about refinancing student loans and compare rates from several private student lenders.
Check if you qualify for student loan forgiveness
Student loan forgiveness means you no longer have to repay some or all of your remaining federal loans.
Here are some federal student loan forgiveness programs and their eligibility requirements:
- Public Service Loan Waiver (PSLF) — This type of loan forgiveness program is for those who work for a government or non-profit organization. To qualify, you will need to work full-time for an eligible employer and have made 120 payments under an eligible repayment plan.
- Loan forgiveness to teachers — Those who qualify may be eligible for a rebate of up to $17,500. You will need to have taught for at least five years full-time at an eligible school or educational services agency. The discount applies to direct loans or loans from the FFEL program.
- Total and permanent disability leave — You may be eligible for service obligation cancellation of your federal student loans for Teacher Training Assistance for College and Higher Education (TEACH) if you are permanently disabled.
If you’re not sure what you can qualify for, it’s a good idea to contact your loan officer to see what your options are.
It’s essential to make sure your student loan officer has the correct contact information so that you receive timely communication about the status of your federal loan, including when you need to start making payments again. Information you’ll want to make sure is up to date includes your mailing address, phone number, and email address.
Refinance your student loans
Refinancing your federal student loans may offer a few benefits, namely the ability to pay a lower interest rate. Check the rates first to see if you qualify for a lower interest rate, which could save you thousands of dollars over the life of your loan. It could also mean that your monthly payments are lower, give your budget a break.
However, refinancing has its downsides, including losing the benefits of federal loans. Some of these include income-driven repayment plans (where your monthly payments are based on a percentage of your income) and federal loan forgiveness programs.
Given some of the downsides, it’s important to carefully consider whether you’re willing to forego federal student loan benefits to potentially save on interest charges. If you decide to refinancebe sure to shop around and compare different loan options, including the rates you might qualify for and other features such as loan repayment options.
Searching for private student loans can be tedious – Credible makes it easy by helping you compare loans from your lending partners in minutes. Enter the details of the loan you wish to refinance and Credible will show you a list of loans you may qualify for.
To start refinancing your student loans, visit Credible and compare prequalified rates from several lenders.