March 19, 2020
Aarthi Swaminathan, Yahoo Finance
In response to the coronavirus, U.S. President Donald Trump has just waived interest on all student loans.
“I am announcing the following emergency actions today: to help our students and their families, I’ve waived interest on all student loans held by federal government agencies and that will be until further notice,” he said during a press conference on Friday.
Experts reacted quickly, and they were divided on the announcement.
“Dealing with interest is an important start and I’m glad they recognized the need for action to help borrowers,” Ben Miller, vice president for postsecondary education at the Center for American Progress, told Yahoo Finance. “But they need to do more to make it easier for borrowers to pause payments, automatically prevent individuals from going delinquent, and immediately stop the seizure of tax refunds, security, and wages for defaulted loans.”
“No one should fall behind on their student debts because of this national crisis,” James Kvaal, former President Obama’s top higher education adviser, told Yahoo Finance. “Waiving interest is welcome, but the key question is whether students and parents can reduce or halt their monthly payments. Pausing payments and stopping punitive loan collections would give immediate relief to students and parents facing economic hardship and uncertainty.”
To be clear, Trump has not yet elaborated on how exactly this will take place, and whether this is for all loans or just for federal student debt, which one expert alluded to.
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First off, none of this would be possible without God. Jesus Christ! Wow… I can’t believe it. This doesn’t feel real, someone slap me, pinch me because this can’t be real ya’ll. I have really paid off my Fedloan student loan account. When starting this repayment journey 8 years ago, I thought I would die with my student loans. Below is an update of my student loan balance.
I would like to provide 7 tips that have helped me pay off Fedloan. I’m not out the woods yet, as I have one loan left to pay… Nelnet. Let’s get to the tips.
1. Grace Period is not a chill period.
Fedloan gave me 6 months of grace period. A Grace period is the length of time you are allowed to go without making your first loan payment. After securing my first job out of school, I didn’t think about interest accruing each month. Boy was I sorry for not paying towards my debt sooner, as my loan balance grew.
2. Get into a repayment plan that works for your situation.
I lost my job after 3 months and had a hard to finding work that matched that same pay. Quite frankly, no job have I had since has matched that pay. I’ve had to work multiple jobs to match it.
Therefore, my main jobs haven’t paid that well. So I’ve been in the IBR program for the last 8 years.
Your payment is reduced however you must renew year. Don’t forget to renew.
3. Pay as much as you can as often as you can.
To do so I lived like a college student, I didn’t eat out much, and didn’t take frequent vacations, it’s been 2 years since my last vacation. Anyways…As for myself, I used my tax return to pay the remaining balance of $4,333.13 from my Fedloan account. I count myself blessed to receive a tax return, as I know how difficult tax season can be for many people. My first year out of college, I owed 1,200. I cried for real yall. But I got through that uncomfortable time, and you can too. Please consult with an expert, because I am not a tax professional.
4. Pay every 2 weeks.
Don’t take my word for it, do an internet search for bi-weekly loan calculators. Use mortgage repayment calculators to see the impact of paying every two weeks.
5.Keep updated spreadsheet of balances.
Previous servicer ACS added an extra $200 in interest, instead of reducing my principal after 2nd payment of $200. You better believe I argued with them over the phone and email.
I may have said some nice so nice words. Forgive me….
6. With that said…Keep contact info current and stay in contact with servicers.
You may move or your loan may get transferred (Brazos transferred my loan to Fedloan, adding to the total)
It can be scary not knowing what’s going on. Especially if you have a payment due and the servicer can’t reach you.
7. Be aware of processing speeds.
Fedloan usually takes 2-3 business days to process payments. So I never pay my accounts on near the weekend such as Thursday/Friday or on the weekends. Doing so will help you avoid late fees. Yes, loan servicers charge late fees.
My debt is paid always on a Monday or Tuesday to give the servicer more than enough time throughout the week to process my payments.
I also never pay a loan account during holidays such as Christmas, Thanksgiving, or New Year Eve or Day.
We all just get lazy around these times and want to relax. Right before a holiday break is the best time to send a payment, the workers are in a mad dash to get out of town.
Bonus Tip: Celebrate! As you pay your debt down, take a day off, treat yourself to a meal. Before I was married, I took myself out to many dinners and movies. You must be able to celebrate and love yourself for your accomplishments first, before others can. Now that I’m married with kids, I celebrated my Fedloan payoff by taking my daughter to the movies.
Hi everyone! Thank you for the continued support along my debt repayment journey. Below is my student loan balance update.
I have now paid off 68% of my student loans. With my student loans now at $26,646.87, I struggle with a lot of what ifs. What if I attended a cheaper school? What if I didn’t have student loans? What if the $58,661.20 paid toward my debt’s principal was money added into retirement accounts?
I snap out of the “Woe is me” and remember…
1 Timothy 6:6-10 (NIV) reads, “But godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out of it. But if we have food and clothing, we will be content with that. Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs”.
This scripture is not saying we should have nothing else beyond food and clothing. Nor is this scripture condemning ambition and the desire to earn wealth. This passage warns us against greed and the misuse of wealth.
Money should not be our final goal. We should aspire to know the Lord more; because he gives us the ability to enjoy what He blessed us with. Have you ever logged into your social media account and became envious of a friend’s latest vacation, celebratory post of a purchased house, or new job/promotion?
Comparing ourselves to others and living with regret is dangerous. There are times we will make lane changes and reverse to parallel park. However, staying fixated on other cars and not the road ahead of us will cause crashes-resulting in property loss or death.
Regardless of what our peers earn annually and possessions they enjoy, we must remember “Whatever you do, work heartily, as for the Lord and not for men”-Colossians 3:23 (NIV).
I will soon release a video entitled, “Most Affordable Texas Colleges-Legit Schools Costing Under 20k Per Year”. The video will be available through the No Debt But Love YouTube channel. Please subscribe to the channel, like, and share the videos; your support is much appreciated.
Why So Happy?
Waking up Monday mornings is always a drudgery for our house. But this Monday morning, as I groggily walked to the restroom to wash my face, my wife wore a beaming smile and greeted me cheerily. Her greeting was contrastingly returned with a slowly motioned wave and mummified growl, “Morning.”
Despite my groggy state, I couldn’t help but be suspicious about her extra energy boost. While reaching for a washcloth, in the corner of my eye, was a pregnancy test leaning against the wall. I tried to delete the image of the pregnancy test to shield myself from fear and pain.
My wife and I have been married for 5 years and were coming to terms with the possibility of never being able to conceive. I assumed the pregnancy test would read negative, but out of hope, I took a peek at it anyway.
To my amazement and disbelief the test read positive. Then I thought, wait, this is an April Fools’ joke, why would she do something so mean? But this was in November, April was 5 months away. Then my attention was drawn to sticky notes my wife placed above the pregnancy test where she wrote, “We prayed and God answered.”
Still half-conscious, it clicked.
“Wait… we’re pregnant?!”
Almost instantly, the sleep fell from my eyes.
She grabbed my hands and excitedly screamed, “Yes, we’re pregnant!”
I can’t explain the joy in knowing that my little girl will be here in August; I feel alive again!
Sacrifices of Parenthood
Once the initial elation surrounding my little girl’s arrival wore off, the reality of newfound responsibilities rose to the surface. We will lose sleep, time, and maybe even some friends. And of course, as we all know, raising a child can come with a considerable price tag. Half of me is joyful in anticipation of my child’s arrival, and the other half is anxious. I still have student loan debt to repay and sometimes wonder if waiting longer before starting a family was the better option.
But I am proud to have the opportunity and privilege to raise a child.
Fatherhood is the best gift imaginable, especially since for us, the seemingly impossible became possible. Two little eyes will be looking to me with love every day from this point on, and a little mouth will call me “dada”. Why would I not want the gift I have been given after being blessed with it?
With that in mind, I now prioritize savings over debt reduction in anticipation of the costs of raising a child as well as any birthing complications. Although I want to get rid of student loan debt faster, it would be a pity not to provide for my family first.
New Debt Payment Plan
My student loan accounts are paid bi-weekly, totaling initially $425.51 every two weeks as shown below. I have since reduced the amounts made on the debt to an updated amount of $248.76.
The principal paid bi-weekly has decreased from approximately $304.99 to $137.31, due to reduction in repayment. It’s a little disheartening to see my momentum slow a bit; but one thing’s for sure, my debt is decreasing.
What matters most is my beautiful wife and daughter are healthy and strong.
For all the parents out there, how have you tackled the financial responsibilities of student loan debt and parenthood?
Until next time folks, fight on.