Take It From Me…These Loans Won’t Stay Paused Forever

January 24, 2022
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Regular tips and advice to help you better navigate young adulthood from someone who had to learn some of this stuff (way too much of this stuff) the hard way

As COVID reaches its second full year of impacting just about every aspect of our lives, pausing federal student loan payments and interest being added to loan balance, and private lenders allowing loan holders to enter temporary forbearance has given loan holders one less thing to financially worry about. Not too long ago, the original February 1st payment restart was pushed back to May 1st, giving us loan holders another three months without having to make payments or having to deal with interest being added to our balances.

However, this pause will not last forever, and without the off-chance of the partial or full forgiveness of federal loans, those who are out of school will have to start repaying while added interest will return for current students or recent graduates who are still in the grace period. And considering how much pressure it took to receive this last extension, the pause may be coming to an end soon.

According to  Investopedia 30% of Americans have student loan debt and collectively owe more than $1 trillion dollars ($1,000,000,000,000). And without many avenues borrowers can take to achieve partial or full loan forgiveness, about one-third of the American population will soon have to prepare themselves to add yet another expense back into their lives. 

If you’ve taken out loans: first of all, there’s no guilt or shame in having to do so. School is expensive and only getting more expensive. Don’t let anyone make you feel some type of way for doing what you had to do to move forward in your post-secondary education. While I will not blame a coffee habit or an affinity for avocado toast for our precarious financial situation there are some proactive things that you can do now to hopefully make life a little easier for you down the road.

If you don’t mind living with others, being in a housing situation where you’re not responsible for all of the bills can lessen your burden once loan repayments start. If you’re cool with your family (or at least one family member) or with a friend or friends, think about returning to or finding a place for everyone and discuss ahead of time how you all will split shared expenses and financial obligations. 

Take a look at your current financial obligations and see where you can cut back and eliminate. Look at things like cable, streaming services, car insurance, and phone plans. This alone can run hundreds of dollars a month. Look into if you could go down a cable plan, maybe not have every paid streaming service (or at least choose a less-expensive plan), and research less-expensive phone plans. If you feel like you may be paying too much for car insurance, research plans and costs. Every little bit helps when it comes to repayment.

We only have so many hours in a day. And while we want to enjoy ourselves and not overwork ourselves into health issues or worse, evaluating how we spend our time may also help with getting enough to repay. More and more people are using side hustles and second jobs to pay off debt and gain financial independence. This is a route you can take, but please take care of yourself physically, mentally, and emotionally. To call this a stressful time is an extreme understatement, so listen to your body about what it can handle and don’t overextend yourself. 

This is a drastic option that should not be taken lightly, but the military does have programs that offer financial assistance for enlistees. If that commitment is something up your speed, check with a local recruiter to find out what potential assistance you can receive in exchange for a few years of service. If the military isn’t on your wavelength, there are other ways to serve your country and receive some financial assistance as well. Programs like Teach for America, City Year, and AmeriCorps offer ways to defer qualified loans or put them in forbearance and also provide educational awards that can be used to pay down your loan for those who successfully complete their terms. 

The military also offers several avenues for service members and veterans to attend school either while they serve, ROTC programs that require service after graduation, or programs for veterans to attend school once they finish their last contract.   

As currently constructed, the Public Service Loan Forgiveness Program does give some long-term relief for those who enter qualified professions provided they follow the program’s requirements to the letter. You do have to make on-time payments for 120 months, but those accepted into the program and who fulfill all of the requirements can have their remaining balance forgiven after this time.    

Talk to your loan provider directly to see what (if anything) can be done to lower your payments or to enter into forbearance. Being up front and working with them yields a better result than just ignoring calls, emails, and texts from loan providers, especially since non-payment can negatively affect your credit score. 

While I know this post about helping to prepare student loan borrowers for the start of repayments and interest, I also wanted to take a moment and give some advice for those who have not had to take out loans yet and hope to go to/continue in a post-secondary program.

Here are some things you can do now to either decrease or eliminate your need to rely on loans to attend college, university, or technical training programs. 

If you’re a high school student: you can find out how to register for AP courses, take the tests at the end of the school year, and earn college credit for doing so. The tests do have a fee, but check with your school about fee waivers or programs that will pay the fee for you. Also check with the colleges and universities you’ll apply to find out the score you’ll need to make so that it’ll transfer (some tests, you only need a 3 on but more and more schools are only accepting 4s and 5s).

Another option for high school students is to attend an ECHS or take dual credit classes from their local college or university. Taking this route allows students to fulfill high school and college requirements at the same time and entering universities as a sophomore or junior saves you at least one year’s worth of tuition. Also, there are four years that have scholarship opportunities for transfer students, so you could have financial assistance with covering your last undergraduate hours.

Fill out your FAFSA/TASFA: while the priority deadline has passed, you can still fill out either one (find out more about the FAFSA and TASFA and find out which one you need to fill out here and here) to make yourself eligible for non-loan aid including merit-based aid (grants and scholarships you’re eligible for based on performance, intended major, interests, and more instead of need-based, which is based on your EFC and familial income), work-study and on-campus employment opportunities.

Make looking for scholarship and grant opportunities a part-time job: actively carve some time into your schedule to look for in-school and out-of-school grants and scholarships that you can apply for. Your high school counselor’s webpage, current or potential school’s financial aid page, and sites like Fastweb, Scholarships.com, on CoFo’s website all have several opportunities. If you’re in a sorority, fraternity, campus organization, or honors organization, check to see if there are any opportunities on the local, regional, or national level that you can apply to as well. This doesn’t have to take up a lot of your valuable time, but do take an hour here or there throughout the week to search for opportunities, find out how to apply to them, and then complete the application process. Think about it, five-ten hours a week maximum could save you tens of thousands of dollars in loan repayment.

Look into community colleges: I know this is not necessarily the college experience you envisioned, but two-year colleges provide the same general education classes you’d take at a four year but for a fraction of the cost. And you’d still get to go to a four-year university if you choose (and perhaps have a better chance of being accepted than you might as an incoming freshman depending on where you apply as some universities have guaranteed admissions for students who will transfer with a certain amount of credit or with an Associate’s degree. Check with your potential school’s/schools’ transfer admission page to find out more).  

If you’ve graduated from high school and are taking post-secondary classes, take as many classes at the community college level as possible. This alone saves thousands of dollars of tuition during your first year or two of college, but it allows you to enter a four-year as an upperclassman once you’re ready to do so.

If you’re still in lower-division (1000s and 2000s) classes at a four-year school and still have hours you can transfer in, you can still take some classes at a two-year school while being enrolled at a four-year school. Throughout my years in school, I met several people who lived at home during summer and knocked out gen-ed and pre-reqs classes at their local community college. This let them enter their major-related classes sooner and graduate earlier. I’ve known others who actually took an online class or two during the fall and spring while they attended four-years, which allowed them to graduate early as well.

If you’re already working, check to see if your job has tuition assistance or reimbursement plans available for employees. This alone can help you save thousands of dollars each year and if you choose a major that’s relevant to your job title, this process could put you in the position to move up in the company you’re in if you hope to continue to work there after graduation. 

And one more note for those of you thinking about graduate school or post-graduate work: there are ways to lessen your expenses during this time as well. Apply for fully-funded programs where you serve as a TA or GA in exchange for your tuition being paid. You’re still responsible for housing, textbooks, and other expenses so do your research before making the commitment, but you’ll save thousands on tuition each semester you work for the school you attend. Full-time employees at four-year institutions with graduate schools can often work out a way to attend graduate school part-time at little or no tuition cost as well.

For those of you looking into medical school, law school, dental school, etc, there are also scholarships, grants, and other ways to help you pay for tuition that you do not have to pay back. Also, go into school with your future in mind by choosing a speciality (or at least receive enough training) in a more lucrative area of your chosen profession that will help you earn enough to pay off the loans you may end up taking out. If you’re passionate about a particular, but lower-paying area, make sure to gain enough skills in that as well. Find out how you may be able to switch and do what you want to do once you get to a point where you can afford your monthly expenses or once you finish paying off what you owe.