5 things to look forward to in 2022

Last year was a season of considerable change in the student loan industry, including the fourth extension of the freeze on student loan payments.

Both service providers and borrowers have experienced its impact in 2021, from the change of FAFSA applications to the withdrawal of student loan service providers to the overall reform of the public student loan relief program.

What you need to know in 2022

With all the changes regarding student loans, it may be difficult for borrowers to keep up with everything they need to know. This is why we are here. We have compiled five things you need to know about student loans in 2022.

1. Payments increase again in May

The student loan payment plan will restart on May 1, 2022.

At the end of December, President Joe Biden extended Student loan payment suspension By April 2022. This is helpful for many borrowers who may have difficulty finding stable jobs and repaying debts during the ongoing pandemic.This Automatic student loan tolerance This plan is part of the CARES Act COVID relief plan passed by Congress in March 2020.

As the Omicron variant rages at the end of 2021, the extension will give borrowers more time to restructure to recover from the financial impact of the pandemic.According to a Polls According to a survey conducted by the Student Debt Crisis Center before the latest suspension extension, 89% of full-time student loan borrowers stated that their financial situation was insufficient to resume repayment in February. Now they have an additional 90 days.

With the extension, the borrower may wish to take advantage of The Penny Hoarder’s advice on how to prepare to solve the problem Student loan debt repayment.

2. Changes in the student loan service industry

Last year was an eventful year for the student loan service industry.Approximately 15 million borrowers were affected Student loan servicer Companies such as FedLoan, Granite State, and Navient decided to withdraw from the service business.

The timing can of course be better. With the continued payment suspension, the addition of service changes will only complicate the already difficult situation for service providers and borrowers when payments are resumed in May. The logistics involved in transferring the accounts of millions of borrowers to new service providers will test the industry.

If you don’t know who your new service provider is, please log in studentaid.gov And look for the “My Service Staff” section. If you are not sure how to log in, please call the Federal Student Aid Information Center at 1-800-433-3243.

3. Public Service Loan Forgiveness Program

In the past, the Federal Forgiveness Program has been plagued by poor communication and information conflicts between service personnel and the Ministry of Education.In other words, the U.S. Department of Energy announced at the end of 2021 that 550,000 borrowers will see “accelerated forgiveness”, which is Loan forgiveness overhaul.

That means Automatic forgiveness of student loans Tens of thousands.

This is good news (cross fingers) for borrowers who work in the public sector, are veterans, or are eligible for disabilities.Driven by the pandemic, the Department of Energy pledged to “Transformation” The plan will bring hundreds of thousands of borrowers closer to forgiveness.

Will the US Department of Energy really follow up? Please stay tuned for 2022 and the next few years.

4. Changes to the FAFSA application form

The FAFSA (short for Free Application for Federal Student Aid) forms are notoriously difficult, confusing, and lengthy. Therefore, when the Federal Office of Student Aid announced last year that it was about to make changes to the form, this was good news for potential borrowers.

However, by 2022, these changes seem to be Mainly cosmetics. The only major change is that being convicted or failing to register with the selective service system will no longer affect the ability of potential borrowers to apply for financial assistance-although the above issues will remain on the form in 2022.

FAFSA forms for the 2022-2023 school year are currently available, and the deadline for applying for federal assistance is June 30, 2023.State FAFSA deadline Varies from state to state.​​ If you need help completing lengthy forms, check out The Penny Hoarder’s step-by-step guide How to fill in FAFSA.

5. Retirees will continue to deal with student loan debts

Student loans are no longer only available to traditional college-age children. The American Association of Retired Persons reports that by the end of 2020, borrowers aged 50 or over accounted for about 22% of the US$1.6 trillion student debt burden in the United States.

This is an astonishing number and only shows that the cost of public education has continued to rise in the past few decades. This money may come from their own school education or help their children receive college education.

Therefore, retirement seems out of reach for people in their 50s or 60s who are still dealing with large amounts of student loan debt. But there are some options, including:

  • Avoid refinancing federal student loans.
  • Lower federal payments through income-driven repayments.
  • Choose income-dependent repayments for Parent PLUS loans.
  • Repay as much of your personal loan as possible.
  • If you have a disability, check out student loan forgiveness.
  • Have a difficult conversation with your children and ask them to make more contributions.

Learn more about all these coping options Retire with student loans debt.

Robert Bruce is the senior author of The Penny Hoarder.

Source link

Recommended For You

About the Author: News Center