White House intends to extend student loan repayment freeze; Charlottesville financial advisor weighs in

Published: Nov. 22, 2022 at 5:19 PM EST
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CHARLOTTESVILLE, Va. (WVIR) - The White House says it intends to extend the freeze on student loan payments all the way through the end of next June.

Millions of people have been approved for relief through President Joe Biden’s forgiveness plan, but the money is currently on hold due to lawsuits. As a result, it is unclear how much debut, if any, will be forgiven.

“The number one advice is pretend as though the student loan forgiveness isn’t even there,” financial advisor Alex Urpi said. “You may not see that forgiveness until months down the road, if at all depending on how things go.”

It will be essential to make those payments once they resume.

“After a certain number of payments that you just ignore, your loan goes into default, right? And that dings your credit score, big time,” Urpi said.

He says now is a good time to look at income-based repayment plans.

“What would my payment be under that plan, and what would my payment be under my current interest rate and see which one makes more sense to you. Which one might be worth considering, because we’re in a different scenario now than the 0% that we were looking at for the last two years,” Urpi said.

He also reminds people that if they’re looking to take out a mortgage, lenders do take student loans into consideration.

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