Understanding Your Student Loan Repayment Options at the End of the Pandemic Relief Forbearance Period

If you have student loans, you’ve probably seen the news that the pandemic relief forbearance period is coming to an end. Starting August 31, 2022, the pause on student loan repayments and interest accrual that began in March 2020 are set to expire, leaving many borrowers wondering, will student loan forbearance be extended again?

While no one can predict the future, this time around it seems unlikely that the federal student loan forbearance will continue. Unlike in March 2020, the current job market is hot, wages are up, and life has returned to some semblance of normality. And repaying student loans is simply the next step in that return to pre-pandemic life. 

Student Loan Repayment Options

With student loan repayment about to restart, you need to know your options. There are a number of ways you can approach federal student loan repayment, and understanding them will set you up to make the best financial decisions for you and your future. Let’s take a look at your choices.

Income-Driven Repayment Plan

Income-based student loan repayment is an excellent option for many borrowers. Surprisingly, a lot of student loan holders are not even aware that this repayment plan exists. Created by President Obama, the program continues to this day and even includes a bonus forgiveness component. Income-driven repayment plans have helped millions more easily manage their student loan payments. 

Here’s how it works: monthly repayment amounts are based on a percentage of your income. Only those with incomes below a certain threshold can qualify. But if you do qualify, and if you make payments at the reduced rate for 20 years, the remaining balance on your loans at that time will be forgiven. 

Borrowers often express their uncertainty about whether or not they qualify, and how they can stay in the program year after year. A law firm with specialized knowledge about this and other student loan repayment programs can help you take full advantage of this option. 

What reasons might prohibit a borrower from qualifying for student loan repayment assistance?

You might be prohibited from qualifying for student loan repayment assistance if:

  • Your lender doesn’t participate in the particular repayment plan you’re seeking, or
  • Your income is too high, as assistance is provided on an as-needed basis.

Check with your lender to see what repayment programs they offer and for which programs you might qualify. You can also work with a law firm that specializes in student loan assistance. Vohwinkel Law has helped hundreds of borrowers in Las Vegas navigate this tricky repayment landscape — and reap the financial benefits of making it work for them. 

Consolidate Your Loans

Another financially advantageous option for borrowers is to consolidate multiple student loans. Let’s say you have two or more separate loans. Not only is it harder to keep track of multiple loans and payments, but you likely have varying interest rates and repayment timelines to keep an eye on as well. Consolidation simplifies your loan repayment responsibilities by combining multiple loans into one easier monthly payment. 

Consolidation also usually comes with a lower interest rate and a longer repayment schedule, both of which help to lower your monthly repayment amount. This is a great option for borrowers with multiple loans who are looking for a more manageable approach to repayment. And, unlike student loan repayment assistance, there is no income requirement to take advantage of consolidation. 

Pay Off Your Loans

Some borrowers are in a position to simply pay off their student loans completely, by making one lump sum payment. If this option is financially available to you, it can save you hundreds or thousands in interest, and remove the monthly payment burden in one step. 

It’s important to remember that different lenders will offer different repayment options, loan assistance, and other features. You’ll want to check with your lender about the repayment options they offer before making any decisions about the best path forward with your student loans.

What is the Difference Between a Student Loan Repayment Assistance Program and a Student Loan Forgiveness Program?

A student loan repayment assistance program is an option that helps you repay the entire loan over the course of a number of months or years. Eventually, you will pay the loan in full, and you will receive help along the way — a fixed interest rate, stable monthly payments — to get there. 

A student loan forgiveness program is one in which, after meeting the program’s requirements, your loan will be completely forgiven. Check with your lender to know which of these two options might be available to you.

What happens if you default on your student loans?

Borrowers beware: the consequences for defaulting on your student loans can be quite severe. Liens, wage garnishment, withholding your federal tax return — these are all possibilities. Defaulting on your loans will also negatively affect your credit score, which can result in a cascade of additional negative financial consequences. 

And don’t forget that per U.S. law, student loans are not dischargeable, even if you file for bankruptcy. 

In short, one of the best ways to manage student loan repayments once student loan forbearance ends is to find a repayment or forgiveness plan that works for you.

Feeling the pressure of looming student loan payments? A bankruptcy attorney could help.

No one wants to — or should have to — face their student loans forever. Student loan repayment can feel overwhelming and daunting, but the good news is that you have options. 

If you’re feeling the pressure of looming student loan repayments, schedule a free consultation with our team to see what repayment or forgiveness options might be available to you. Vohwinkel Law not only has experience helping Las Vegas students manage their student loan payments, but members of our team also have personal experience managing their own loans, so they understand the challenges student loan borrowers are facing. Let us ease the burden of student loan repayment, and get you on the right path to financial freedom. 


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