Yesterday, I was asked by a mom what to do about current student loan payments. With Federal School Loan interest rates at zero, no payments required until after September, and the possibility of forgiveness, should she make payments on her daughter’s loan? Now there’s an interesting question.
If the first two conditions were all there was, the answer would be easy. Make the payments and get ahead. But with forgiveness hanging out there, making payments could put you at a disadvantage. Recognize that this “compassionate” forgiveness program will be unfair to those of us who have made their payments or avoided loans by working or spreading out their costs by spreading out their classes. This forgiveness program will penalize those who used one of the keys to this country’s success – hard work, thrift, and paying your own way.
Considering all three of the above conditions, I suggested to the mom that she take the payments that she normally would have made and set them aside in a separate account during this time of uncertainty. When things hash out in congress, hopefully fairly soon, she can take the money that she set aside and make the best decision then (with better information.)
Just as a side note, from the latest that I’m reading on forgiveness amounts, it’s looking like an amount of $10,000 on Federal School Loans is most likely. President Biden is balking at anything more than $10,000. Thanks for reading.