Federally held student loans are currently in forbearance, which means you don’t have to pay anything right now. Even better, the interest is at 0%. Basically, if you have a government-backed student loan, your balance isn’t growing. And this hold will last until the end of the year. But it’s important to remember that this is temporary. So, Bold TV‘s David and Julia discuss how you should budget in this limbo period.
Should you take advantage of student loan forbearance?
If you haven’t been financially stable during the pandemic and can’t make payments, David says not to worry. Many people are expecting an announcement about new help for student borrowers. Maybe it’s time to take advantage of this opportunity.
Or should you continue payments?
If you’re financially able to make payments, don’t stop. In a normal situation, interest eats up part of your hard-earned money. But now, any money you pay to your loan amount will go straight to the principal (the total amount you owe). You could end up saving thousands of dollars by continuing to make payments during this period.
Do you still have questions about student loan forbearance? Leave them below! To watch a Millennial Minute debate on student loan forgiveness, click here.