Student loan debt will impact the lives of millions of Americans. Take a look at the numbers:
The amount of student loan debt carried by the graduates of the class of 2017 averaged to $39,400 per student, and the total amount of debt carried by Americans was more than $1.48 trillion. Starting this year (2019), anyone who still owes money, or who is currently shopping for a loan, will be faced with a few new realities that students in years past did not have to face.
What’s in store for your student loans in 2019? Here’s what to expect.
- HIGHER FEDERAL STUDENT LOAN INTEREST RATES
The interest rates on student loans given by the federal government have increased by 0.6% so far. That’s because student loan interest rates are based on the Treasury Department’s 10-year Treasury note auctions. The government then adds on interest. The Fed raised its key interest rate four times in 2018 and projects two increases in 2019. Watch for an announcement in May to learn what the 2019-2020 student loan interest rates will be.
- LOAN FORGIVENESS CHANGES
The federal government pays for student loan forgiveness; the U.S. Secretary of Education expressed that federal taxpayers essentially are on the hook to pay for federal student loans that are forgiven. The good news, current participants in Public Service Loan Forgiveness or income-driven repayment programs are probably safe. However, the future of student loan forgiveness may change. If you apply for debt relief through the Department of Education, expect long processing times. The agency has no employees working full time to address complaints from borrowers.
- LOAN REPAYMENT
You have a few options when it comes to repaying your student loans. From income-driven repayment to making extra student loan payments, the ball is in your court on the actual payments. Just make sure you understand the difference between student loan consolidation and student loan refinance. Income-driven repayment plans are only for your federal student loans. If you have private student loans, you need a separate action plan to pay off your private student loans, as well.The situation for student loans is in a constant state of flux. Bills are constantly being introduced that could make changes to the future of your loans. Stay on top of the changes and ask for help understanding the new rules, as they happen.