what Siouxland needs to know now about the student loan maratorium
SIOUX CITY, Iowa (KCAU) – The White House announced Friday that the moratorium on federal student loan repayments has been extended until the end of the year.
In March 2020, the Trump administration instituted the repayment suspension, so borrowers would not have to make payments on their federal student loans. The Biden administration has granted a final extension until Jan.31, 2022.
“There is no penalty for taking this break,” said Andrew Pentis, senior writer at Student Loan Hero by Lending Tree and Certified Student Loan Advisor, “The interest rates have been set at 0%, and these borrowers were able to get some relief from their monthly contributions in order to focus on, perhaps, higher priority personal financial goals during the pandemic. ”
Pentis said most federal student loans qualify for the moratorium, but some types of loans are not. The loans that are not eligible are Federal Family Education Loans (FFEL), Perkins loans that have been loaned directly by the school, and private student loans. Private student loans are made by banks, credit unions or state governments.
Borrowers with active and eligible federal student loans do not have to do anything for the moratorium to take effect on their loan accounts, which Pentis said would be best to use the time to create a plan for resumption of payments. .
“End your debt as soon as you can,” Pentis said, “Everyone is different, everyone will have a one-size-fits-all solution to resuming those payments, but you definitely want to make sure you have a plan in place. ”
According to a study by Student Loan Hero, Iowa has an average of $ 29,956 in student loan debt. South Dakota has an average of $ 30,3178 and Nebraska has an average of $ 28,684.
South Dakota is ranked ninth, Iowa is ranked sixth, and Nebraska is ranked the lowest in average student debt in the country.
Iowa, South Dakota, and Nebraska each have monthly payments over $ 200 on average and total outstanding amounts of over $ 8 billion.
Some borrowers, including those in Siouxland, may see their loan officer terminating their contract with the Department of Education. This means that these loans will be assigned to a new federal loan manager.
“Last year the Department of Education announced a handful of new service agents, so what you’ll want to do as a borrower is make sure you have an up-to-date address on file with your agent. federal loan, the Department of Education. . That way, when they notify you that your loan has been transferred to a new service agent, you will be immediately notified.
Student Loan Hero published a study that looked at which parts of the country are most curious about the massive student loan cancellation granted by the federal government after being requested by President Joe Biden.
The study used data from Google search queries and found that of the 10 states that searched Google for student loan forgiveness the most, six were in the Midwest. South Dakota ranked number 2 and Iowa ranked number 10.
To see how states would benefit from student loan cancellation, Click here.