SafeAmerica Credit Union

financial counselor

• By Kevin Alvarez

Take These Steps With Your Student Loans

What steps should you take with your student loans – even with the extension of federal student loan payment relief measures? The pause continues on federal student loan debt collection and reduced interest rates on federal student loans to 0% until May 2022.

For those with government-held loans, the relief options provide a record-long “breather.”

It’s not too early to take steps in preparation for the relief programs to end. Borrowers should be ready to make student loan payments, even as policy makers discuss further extensions in the face of an increased number of borrowers becoming delinquent or defaulting on their loans.

Listed here are steps to move forward as protections end.

Take Inventory

How’s your memory in the midst of the longest payment freeze of federal student debt in history? As a first step, take the time to document how much you owe and who to contact about student loan balances.

To get current loan balances, log onto the National Student Loan Data System (NSLDS). The portal will display how much you borrowed, the type of each loan and interest rate, payment history, and the current loan servicer for each loan.

For private student loan information, jog your memory with your credit report, which tracks current and past credit obligations, including student loans. AnnualCreditReport.com provides borrowers with a free report from the three main credit reporting agencies: Equifax, Experian and TransUnion.

These resources are also useful to track current student loan servicers – the organizations that handle payment and administration of your debt.

Track Your Interest Rates

Student loan interest rates vary depending on the loan type and other terms such as the date the funds were first disbursed to you. Again, NSLDS is the go-to resource to discover the interest rates of your federal student loans.

To track interest rates on private student debt, contact each lender for fixed and variable interest rates. SafeAmerica Credit Union offers private student loans through our partner, Lendkey. Click here for current rates and loan programs.

Look at Affordability of Payments

After the lengthy payment pause ends in May 2022, consider overall affordability. Based on your current monthly income and expenses, you might find that resuming payments for federal student loans will stress your budget.

Explore options to lower monthly payments by switching to an income-driven repayment plan.

Private student loan lenders typically don’t offer income-driven plans, but they might offer alternative repayment plans on a case-by-case basis.

Loan forgiveness might be an option. In the last few months, the Department of Education overhauled the Public Service Loan Forgiveness Program. Teachers, nurses, first responders, service members, those working in nonprofit hospitals and other nonprofit and public service workers can potentially have their student loans forgiven

Explore whether you can take advantage of the changes to the public servant loan forgiveness program..

See if Loan Consolidation is Possible

Again, if affordability is an issue, consolidating your student loans sets you up with a single monthly payment.

For most borrowers, consolidation lengthens the repayment period, so your cost of borrowing will actually be higher since you will likely pay more interest over the long run.

This option will depend on your specific financial picture, so be sure to research all the pros and cons of loan consolidation.

Take the Steps that Work for You

It's great to have the added breather for your budget!

Looking ahead to later this year when the payment pause ends, our partners at GreenPath is a useful source of independent information.

Student loan counselors can suggest ways to manage an individual situation if you are feeling overwhelmed as you look to the May 2022 deadline.

This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit

 

Greenpath Financial Wellness

• By Kevin Alvarez

5 Tips for Managing Your Finances Through COVID-19 and Beyond

Information brought to you by our partner, Greenpath Financial Wellness

There’s a lot to get used to in these challenging times. As the pandemic crisis continues, and many are dealing with financial uncertainty—from an income reduction to total job loss— it can be hard to know how to move forward.

Having a defined set of options and a clear understanding of your finances not only helps to better prepare you for the future, but can also make you feel more confident and less stressed about factors outside of your control.

To help you navigate these difficult times, we’ve partnered with trusted non-profit GreenPath Financial Wellness to provide you with some guidelines for managing your finances in times of uncertainty:

1. Prioritize your bills

Changes to our financial lives can often result in stress and mental fatigue, making decisions even more challenging. We have a natural tendency to avoid choices that feel like we are giving something up. Instead, we may try our best to take each day as it comes without a plan.

Getting the most important bills paid first is the most important thing in a time of crisis.

If you are one of the millions of Americans who have enrolled in a forbearance program (programs placing a temporary pause on payments toward credit cards, mortgages and other loans), it’s important to think about how (and when) you will pay these bills as these programs come to an end.

2. Start a Budget

Many people find that the journey to financial wellness is smoother when they take the time to create a budget. It might sound complicated, but there is a way to break down the process.

The number one key to setting your budget? Creating a spending plan. A spending plan can help you to:

  • Figure out how much money you have
  • Understand how much money you need to set aside each month for bills and expenses
  • Setup a plan to meet your financial goals

3. If you’re having trouble paying off credit card debt, consider a Debt Management Plan

Credit cards are important tools for the majority of people, especially in times of financial challenge—but it can be all too easy to spend over your means, and if you have high interest rates on your credit cards, debt can add up quickly.

If you want to get out of debt and get your finances on track, you may find debt relief through GreenPath’s Debt Management Plan (DMP). A DMP is designed to pay off the entire amount that you owe, usually within three to five years. It can help you pay off credit card debt faster and save money on interest charges.

4. Build up an emergency fund (no matter now small)

Never in a million years would you have made a specific financial plan expecting a new virus to disrupt the global economy or your paycheck. Unfortunately, our savings accounts do feel the ripple effect of larger-than-life forces and events across the globe. Preparing yourself for a financial setback, such as an unexpected loss of income, can set you up to handle it with less stress and bounce back more quickly. It is especially helpful to think about these plans at a time when things feel “normal,” so that we get the full advantage of perspective on a potentially frightening and stressful event.

5. Connect with the Financial Counselors at GreenPath

If your finances have been affected by COVID-19, our partners at GreenPath offer free consultations and guidance to help people manage debt, save money, and meet their financial goals.

As a SafeAmerica member, you have access to GreenPath Financial Wellness that offers:

  • Free Financial Counseling
  • Debt Management Programs
  • Housing Services
  • Credit Report Review
  • Student Loan Counseling

We invite you to explore your options and begin your journey towards a financially healthy life with the help of GreenPath Financial Wellness—just one of the many benefits of being a member of SafeAmerica Credit Union.

Learn More