Student Loans in the News: The 'Secret Price' on Other Loans
A brief round-up of recent articles and blog posts that discuss current student loan debates and data
About the author: Kevin Mahoney, CFP® is a Millennial financial expert and fee-only financial advisor in Washington, D.C. Kevin's work with his clients focuses on paying off student loans, buying a house, investing savings, and budgeting. Kevin is the founder & CEO of Illumint, a virtual financial planning firm specifically designed to help couples and young families with their financial decisions.
Student loan borrowers are paying a ‘secret price’ on other loans, study details
Author Aarthi Swaminathan writes:
"The report 'shows that the true cost of this [student] debt extends far beyond monthly student loan bills with borrowers forced to pay tens of thousands of dollars in extra costs when buying a house, purchasing a car, or using their credit card,' Seth Frotman, executive director of the Student Borrower Protection Center, said in a statement.
The details are particularly relevant amid the coronavirus pandemic, which has caused a nearly 15% unemployment rate and has led to many Americans to lean on their credit cards to weather financial shocks. Stimulus packages responding to the pandemic include relief for student loan borrowers."
[Read the entire article over at Yahoo! Money]
Should I use student loan forbearance to pay off other debt?
Tampa Bay Times
Author The Penny Hoarder writes:
"But I’m not convinced you should do either of these things. You say you’re able to work from home and haven’t lost any income. I sincerely hope your situation stays this way.
Still, before you put this money toward debt, I have to ask: How long could you stay afloat if you lost your job tomorrow?
The crisis we’re in has taught us just how essential it is to have an emergency fund. More than 30 million jobs have been lost, and many of those people are still waiting on unemployment benefits to arrive.
If you don’t have an emergency fund that could get you through three to six months without a paycheck, I’d urge you to consider putting what you usually pay toward your student loans into a savings account instead. An emergency fund helps you avoid debt because you won’t need to put expenses on a credit card if your income drops suddenly."
[Read the entire article over at Tampa Bay Times]
More relief could be coming for student loan borrowers
Author Annie Nova writes:
"As part of the House bill passed on Friday to deliver relief to a battered economy, people with student debt would get some more elbow room.
The U.S. Department of Education has already announced that due to the pandemic, federal student loan borrowers don’t need to make payments on their loans until at least October. And during that time, no interest will accrue.
The $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act — or HEROES Act — calls to extend that break for another year, until Sept. 30, 2021.
People with private student loans would also get their monthly bills covered by the government until that date.
Economically distressed borrowers and those with private student loans would also be eligible for $10,000 in debt forgiveness."
[Read the entire article over at CNBC]