If you’re stressed about making your student loan payments, there’s some good news. The payment suspension legislation has officially been extended through December 31, 2020. All in all, it’s a 10-month hiatus.
The suspension is intended to be a critical lifeline for the many Americans who are struggling right now. Wesley Whistle writes for Forbes:
“According to a 2017 Federal Reserve study, the median monthly student loan payment is $222, so the suspension will yield the median borrower a potential savings of $2,220 for the year. That extra money can provide much needed relief to borrowers who are struggling due to the pandemic.”
Whistle notes that borrowers who aren’t struggling financially should think about continuing to make payments during the hiatus.
As a Memphis bankruptcy lawyer, I want to remind you that this hiatus also should not mean a pause from thinking about your finances if you are struggling. At some point, the world will look different than it does now. We will no longer be in a state of crisis, and our financial problems will still be there, in need of resolution. Taking steps to resolve your debt now will be a huge gift to your future self.
America has a student loan debt crisis.
It’s no surprise that our young people are saddled with student loan debt when you look at our colleges tuition and fees. On average, it’s more than $30,000 for private schools and $9,4101 for state residents at public colleges—per year.
The trend of growing debt is unlikely to disappear soon. Class of 2016 graduates left with $37,172 in debt on average—6% higher than the previous year. As the amount of individual debt climbs, so too does the number of defaulted loans.
Many young Americans already feel as if their lives are on pause due to the coronavirus. On top of these extreme circumstances, they’re dealing with student loan debt that makes it impossible to buy homes or start families.
Bankruptcy can help.
Bankruptcy can alleviate the burden of your student loan debt, even if it doesn’t discharge your loans. You have a couple of options, but either will make your life and your finances much more manageable.
A Chapter 7 bankruptcy will eliminate all of your other dischargeable debts so that you can have the freedom to pay off your student loan debts. A Chapter 13 consolidates your debts into affordable monthly payments spread out over three to five years.
Talk to a Memphis bankruptcy lawyer.
If you’re ready to take steps towards financial freedom, we can help. Call us at (901) 327-2100 to discuss your options.