BORROWERS of federal student loans have had a lot to keep up with since 2020, when the COVID-19 pandemic triggered a three-year freeze on loan payments and interest. In 2022, President Biden announced a plan to deliver on campaign promises and relieve up to $400 billion in student debt for tens of millions of borrowers. Last summer, the Supreme Court blocked that plan. Since then, the Biden administration has unveiled a series of new debt relief programs; if all of them are implemented, they would provide relief to more than 30 million borrowers and forgive $153 billion in loan debt. But some of those plans face legal challenges, too.
If you're managing student loan debt-and especially if you're struggling to keep up with payments you may have questions about recent proposals and what they mean for you. Here, we highlight the key points.
The pandemic-era suspension of federal loan payments and interest concluded last fall. Is there anything I should know now that payments have resumed? As borrowers transition out of the payment pause, the U.S. Department of Education is extending them an "on ramp" period. During this period, which stretches from October 1, 2023, to September 30, 2024, the agency will not report missed loan payments to the creditreporting companies (Equifax, Experian and TransUnion) and will not place overdue loans in default or collections.
Now that interest is accruing on loans once again, it's worth noting that you may be able to deduct up to $2,500 a year on your federal tax return for interest paid on student loans. You can also get a discount of 0.25 percentage point on your interest rate if you set up automatic payments on your loan servicer's website.
Bu hikaye Kiplinger's Personal Finance dergisinin July 2024 sayısından alınmıştır.
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Bu hikaye Kiplinger's Personal Finance dergisinin July 2024 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
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