I came on today not to spew about my thoughts on the blocking of Biden administration’s student loan debt forgiveness. There are enough opinions, from both sides, on the subject matter on the web as is. This space isn’t meant to polarize people by differences anyhow. I am here to offer what we can do in the meantime. My purpose here is to help. The likelihood that we face student loan repayment resumption sooner than debt cancellation is all too probable. It would be a shame to leave millennials on the stranded hope that their debt would disappear (even partially so).
I recognize that whatever advice I could give today is the same old song and dance, but it’s what has helped my family survive. If anything, I hope it serves as a reminder, an inspiration, or the last threadbare bit of community for you. At the very least, may it help keep your sanity intact. In my opinion, what shall we do now that student debt forgiveness is blocked? Prepare for the worst. Fortify our savings. Limit our spending. Rely on thyself, thy community, thy loved ones. Trust that you have the power to get through.
What to Do Now That Student Debt Forgiveness is Blocked
- Increase your savings. Put as much as you can in the proverbial piggy bank while the interest rate is still at 0%. Lucky for you, the High Yield Savings Account rate at Marcus is at an all-time high of 3% APY! Compare that to Chase Saving’s measly 0.1% APY. Plus, my referral link here gives my readers an additional 1% APY for the next 3 months. Meaning right now you can sign up for 4% APY return on your savings. If you’ve been saving this entire time like we have, you can get a generous monthly return on your savings. Looked at another way, this interest earned can be like adding to your income earnings. You can read my article here about why Marcus is great for short-term savings.
- Limit your spending. Inflation is very high right now. Holidays are coming up. The market is down. There are so many things going on right now that the savers are going to benefit a lot during this time. I would advise what I always do, which is to curb your spending. I wrote how to reduce spending during the holidays. I collected frugal challenges for you to try. I also wrote about budgeting and how it helped us tremendously pay down my student debt! We use YNAB to budget. It has been five years, and I still check in each week to look at our numbers! You can sign up with my referral link here to try YNAB for FREE.
- Know what your payments will look like. I was on a call with my sister a few weeks back. She lives in Madrid, Spain and is more out-of-touch with the current student debt situation in the States. However, she herself still has debt from her Grad School program in California, ten years ago! I was filling her in, when she said to me, “I’m just going to pretend like it’s not coming back and the 0% interest will be extended again.” My sister and I are polar opposite beings. But I was shocked to learn that she did not even know what her payments will look like when it resumes. In fact, she didn’t even want to calculate it with me. I would highly recommend the avoidance technique. I get that it’s what a lot of you need in order to mentally get by. As if life wasn’t overwhelming enough! Having to carry the burden of student debt is taxing on the psyche. Trust me, I KNOW. But the one thing that saved me from depression, anxiety, and utter madness, was the feeling that I was in control of my finances. It made me human and alive again. I proved to myself that it wasn’t up to the rest of the world how my life played out. It’s going to be easier to assume there is nothing you can do, but I promise you there is. Now is not the time to shut down and give up. It’s the time to live to the fullest. Reading this book helps.
- Speak to a finance person about your options. Look, I am not a financial professional, nor do I pretend to be one. I’m just another millennial trying to be 100% me while navigating my student debt. The truth of the matter is, there are a lot of financial paths to take. Shall you pay down your student debt while it is still at 0%? Shall you invest in long-term investments and prepare for retirement because time is on your side? Shall you place everything in short-term savings accounts and then pay the loans aggressively when it resumes? Are you all on the right repayment plan? I mean, I’ve got all the questions. As always, I turn to Travis Hornsby and his team at The Student Loan Planner. Travis saved us thousands of dollars by turning us onto the correct plan. I have full faith in his team and expertise.
I hope this list of what to do now that student debt loan forgiveness is blocked was useful.
Here are other student loan things I’ve written:
- My Student Loan Repayment Journey
- Where We Are At With Our $575,000+ Student Loan: An Update
- The Ever-Growing List of Things I’ve Done to Get Out of Student Debt
- Dear College Kid, The Best Time to Face Student Debt is Now
- Preparing for the Resumption of Student Loan Payments
- CHOOSE FI podcast interview episode 395
- CHOOSE FI podcast interview episode 098
Photo by Siora Photography on Unsplash