If you have been watching the headlines about student loan forgiveness, you may be wondering whether this could reduce or eliminate your balance.
A report published by CNBC discusses issues related to the likelihood of the federal government canceling student loan debt.
Support from leaders often does not lead to action
Experts say you should not depend on forgiveness until the legislation actually passes. Although the President’s administration recently expressed support for the idea of erasing $10,000 worth of student loan debt for every borrower, nothing is certain. Putting off dealing with your loans just in case the government does forgive some of them could lead to more financial trouble down the line.
Personal actions may be more effective
Some borrowers continue to make payments on their federal student loans each month, even though the government has suspended payments until September. However, you need to determine the best course of action based on your financial situation. If making payments would cause financial hardship, you may benefit from setting aside a partial payment in a savings account so that you have that resource when payments are due again.
If you are looking ahead and worrying that you cannot afford to make student loan payments when they resume in the fall, you may want to consider debt relief options, instead. Although it is very hard to eliminate student loan debt through bankruptcy, some borrowers can temporarily halt student loan payments by filing for Chapter 13. Some people find that making student loan payments is possible if they wipe out their other debts through Chapter 7 bankruptcy.