Nerdwallet.com just published an article on the difficulty that new graduates are having finding a job. They made some good points and offered a couple of good suggestions.
If you or someone you know owes a Federal student loan and is looking for work, you should first know that you can probably get no-interest forbearance through December as part of Coronavirus relief. If you owe on a private student loan, it won’t work like that.
One of the first points made by Nerdwallet was that entry-level positions have dropped by 68% due to the Coronavirus. To add to that, many people are looking for any job they can get. The new graduate is competing with millions of unemployed Americans.
What to do, what to do? The good news is that you have a couple of months to plan. That’s not much, but it’s better than nothing. As of right now, the Federal student loans will start requiring payments again in January, But in an election year, who knows what will happen. There could be another deferment, but that’s not something I would count on.
If there’s not another deferment, you can change your Federal student loan to an income-driven repayment plan or apply for an unemployment deferment. The income-based plan is the better way to go.
But don’t wait to start your process. Decide what will work best for you and start filing the paperwork. If you wait for congress to act and don’t start the process until January, the people who handle that paperwork will be buried, and you could still wind up with a problem.
For private loans, you can contact your lender. They might defer payments, but don’t count on an interest deferral. Interest typically keeps accruing.
What’s the bottom line? Those who already have debt will need to muddle along and take advantage of any legitimate program to get you through. Remember that you typically can’t bankrupt Federal student loans. Also, remember that there are scammers out there ready to take advantage of the unwary. Investigate offered programs and remember that if it sounds too good to be true, it almost always is too good to be true.
Those who are currently in college or getting ready to go to college should reconsider borrowing any or any more money. For the large majority of people, debt is a “ball and chain” that will force you out of plans that you may have for your future. Check out the ideas for not borrowing and for paying down what you’ve already borrowed in my recently published book, “Say No! To College Debt”. And keep an eye on my blog. When I see deals or programs that will help avoid college debt, I share them.
Thanks for reading.