How to Pay Back Your Student Loans As Cheaply and Quickly As Possible

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If you're grappling with student loans, you're certainly not alone. The ever-evolving world of student loans can be a financial minefield, and understanding the latest developments is crucial. In this blog post and podcast episode, my guest and I will explore the current state of student loans, recent policy changes, and an innovative new program that could change the game.

This week on the show, I have Becca, a Certified Public Accountant (CPA) and consultant with Student Loan Planner, a service designed to help borrowers untangle the complex web of student loan repayment. Becca explains the intricate nature of student loans and the lack of clarity surrounding the best repayment options tailored to individual situations.

The Student Loan Conundrum:

Student loans differ markedly from other types of loans. They involve minimal credit checks, and the exact terms of repayment is determined after graduation. This lack of clarity often results in interest accruing during the grace period, before borrowers make their first payment. Unlike traditional loans, student loans don't provide fixed payment schedules, and the outstanding balance can grow over time.

The Recent Timeline:

In March 2020, the pandemic hit, leading to a temporary pause in loan payments. This pause continued under the Trump and Biden administrations until a debt ceiling crisis forced the decision to end the pause.

The Supreme Court Ruling:

The Biden administration had unveiled a forgiveness plan, offering $10,000 per student loan borrower, with higher amounts for Pell grant recipients. However, this plan faced legal challenges and ultimately did not survive a Supreme Court ruling.

Introducing the Save Program:

In response to the legal issues with the forgiveness plan, the Biden administration introduced the "Save" program. Unlike a forgiveness plan, "Save" operates as an income-driven repayment program with a more solid legal foundation. 

It offers a more favorable formula for calculating payments, reducing the percentage of discretionary income required for payments.

How Save Works:

The Save program is designed to forgive student loans over time gradually. It lowers your monthly payment, and crucially, unpaid interest does not accumulate. The program even allows for a $0 monthly payment for many borrowers, and these $0 payments count towards the 20-year forgiveness period.

In Conclusion:

The landscape of student loans is indeed a complex one. Recent developments like the Save program aim to provide borrowers with more affordable and flexible repayment options. 

Understanding these changes and seeking professional advice can help individuals make informed decisions about student loan repayment.

Need More Support?

I recommend consulting with Student Loan Planner for advice regarding your student loans. Start by listening to my interview with them, as my guest, Becca, answers many commonly asked questions.

If you need further support, I recommend booking a consultation with them, and if you book through my link, you'll get a mini Run Your Money Session with me or $200 off my 6-week Run Your Money Road Map!

Book your consultation with Student Loan Planner HERE, and check out how I work with clients here.

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