The Coronavirus Pandemic has a massive effect on the United States job market. According to the most recent statistics from the Bureau of Labor Statistics, non-farm jobs have declined since February 2020 by about 9.9 million and approximately 6.3% of Americans are currently unemployed.
For college students on the brink of graduation in May or June, it offers a grim future. They may worry about how they 'll find a job, pay the bills or in many cases, pay their student loan bills once they start coming due.
If you 're in this boat- close to graduating and with student loans in tow- you 're not without options. It's helpful to use an online resource like Credible to determine which option best suits your individual circumstances. There are a few ways you can keep up with the storm and help with student loan bills.
How do you manage student loans in a hard job market?
If you have federal student loans, then you 'll have a little leeway before you need to start making payments. Due to a move by the Biden Administration earlier this year, federal student loan borrowers do not have to make payments until September 30. Loans also wo n't accrue additional interest during this time.
With that said, you need a payment plan for those payments coming from October 1. Fortunately, federal loans have a number of options, including deferment, different repayment plans and income-based repayment, which base your monthly payments on your monthly earnings.
This means that even after September 30 if the borrower is still unable to find employment and has no income, his or her monthly payment obligation would likely be reduced to zero, said Ross Riskin, Associate Professor of Taxation at the American College of Financial Services.
What is the best perk? If you get a job in a government or public service field- like teaching, for example- you can potentially have your federal loans completely forgiven.
If you have a private student loan, refinancing could be something to consider. Though you can refinance a public loan, it would mean losing all of the benefits these loans have- including the payment pause through September 30 and the income-based repayment and government forgiveness programs mentioned above.
The administration is also considering forgiving any from$ 10,000 to$ 50,000 in federal student loans- yet another reason to hold onto these federal loans if you have them.
However, refinancing can come with some big advantages with private loans. One could reduce the interest rate and the long-term costs of the loan significantly. It may also reduce your monthly payments quite a bit- especially if you choose a longer-term loan than the one you have currently.
Refinancing can help increase cash flow- something much needed if you 're financially unemployed or struggling.
Now may be a great time for both current graduates with private loans and borrowers with existing private loans to consider refinancing to reduce the cost of their loans, increase cash flow and be able to divert funds towards other financial goals, said Riskin.
The downside of refinancing is that it comes with various costs and fees. You 'll also need good credit in order to qualify- luckily, shopping around for refinance can help. Rates, terms and qualifying standards tend to vary from one student loan lender to the next, so using a tool like Credible to compare your options can ensure that you get the best deal for your needs. Before you move forward, you should also use a student loan refinancing calculator to get a sense of how much money can be saved in monthly payments if you want to finance them both over time and on a monthly basis.
If you 're worried about finding work after graduation and making a loan repayment after graduation, there are options.
If you have federal loans, take advantage of the payment pause that was just extended through September and use this time to get ahead. If you 're a private loan borrower, think about refinancing, and be sure to shop around.
Using a tool like Credible to compare lenders can ensure that you get the best rate and terms possible. Can be used to get prequalified loans and deals without hurting your credit score? Have a finance question, but do n't know who to ask it?
Email Credible Money Expert at credible.com and your question may be answered in the Money Expert column by Credible.