How to Prepare for Student Loan Payments in January 2021

How to Prepare for Student Loan Payments in January 2021

As the New Year begins, you should prepare yourself for student loan payments in January 2021.

Student financial help is available to most full-time school students and financially poor college students.

The Student Loans Company (SLC) is liable for paying educational expenses that go straightforwardly to the college, and for paying the majority of the financial help to which you are entitled simply into your bank account.

This help might be a support credit, any awards, or a DMU bursary or scholarship.

Newly elected president Joe Biden has said that his government will forgive student loans and also the relief that was provided during COVID-19 in 2020 will be extended in 2021 too.

Now if your federal student loan is currently in forbearance under the Trump executive order, you should still prepare for repayment to resume in January.

Until the newly elected government passes any bill related to it you should resume your payments in January. Below we have discussed few easy steps about you can start repaying your federal student loans in 2021.

Stay up-to-date with the news on Student Loan Payments

When the COVID-19 pandemic began in the U.S, President Donald Trump’s government passed a bill stating interest-free federal student loan forbearance through Dec. 31, 2020.

Chances are high that both subsidized and unsubsidized federal loans will resume in Jan. 2021.

When the payment resumes, you have to either pay the same amount that you were paying earlier each month or depending upon your loan servicer you can see a slight interest adjustment in your repayment plan.

Now as the government has changed that all could happen depending on the new administration.

Although during his presidential camping, President Joe Biden has said that he will cancel up to $10, 000 of student loan debt, and even more for people who are working in the public sector.

But the thing is that it is still a proposal and it has to go through the legislative process to become a bill. So far this proposal is still pending and no one is now talking about it.

In this time of the pandemic, it is understood that the period of the student loan forbearance program won’t extend beyond December 2020, although there are millions of people who have borrowed loans and need support from the government.

Now many people are saying that Joe Biden will lessen the burden for many borrowers as he said in his election campaigns, but it good if you start paying your federal loans as early as January 2021 until any bill is passed.

Plan well ahead

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As we have discussed above, you should start planning the payments from January.

Shortly you will also start receiving emails from your student loan servicer reminding you of those payments that will resume in January.

We recommend you to act actively from now and call your student loan servicer or you can simply login into your loan account to check your repayment schedule.

When you log in to your account, you must also check your inbox message for any notice from the education loan department.

Explore your options

If you find yourself coming up short, plan a call with your loan servicer to get some information about accessible ways forward.

Know that there will be compromises for alternatives, for example, loan renegotiating, consolidation, and installment deferral.

If you have lost your job in this pandemic or you are financially weak, then you must try to arrange funds for your repayments starting January.

Also, if you are one of those whose loans were in forbearance for the better part of 2020, you should make sure that you get the right information about the highest and lowest possible amount your new monthly payment could be when things begin again in January.

Assess your spending

In this time of pandemic when earning money is tough, you should watch your spending closely. You should limit yourself from wasting additional funds that you earned or you have and should save it for your student loan installments beginning again in January.

This is the ideal opportunity to refocus. This will help you benefit as much as possible from what you saved.

You should also plan your budget for January 2021 and do not forget that this budget will look different than before the pandemic.

Your budget should not only focus on holidays but also post-holidays. In this holiday season, you should spend with proper planning and should avoid spending on things that are not necessary.

Always remember that starting January 2021 your student loan payment may be due and also the other bills.

What to do if interest-free forbearance continues

If the current student loan relief proceeds, you have a few alternatives about how to deal with the cash you would put toward your loans.

Whatever you choose to do, it’s imperative to think about your entire financial image, from investment funds to pay to obligation, so you can bring in the smartest money choices for your necessities.

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