*Student Loan Debt Reaches 1.6 Trillion Now What?

*Student Loan Debt Reaches 1.6 Trillion Now What?

You just graduated in the middle of a pandemic, you had to have a virtual graduation ceremony, unemployment rates are double digits and now it’s time to pay back your student loans.  Just like paying for college, paying back your debt is loaded with options.

  1. Student Loan Forgiveness is where I would look first. If you work as a teacher, nurse, doctor, government employee, a non-profit, medical technician, or served in the military to name a few, you may qualify for some or all of your student loans to be forgiven.
  2. Next if your loans are Federal Student Loans you may qualify for an Income Driven Loan. This will allow you to pay roughly 10% -15% of your discretionary income towards student loans.  Discretionary income is what you have left after payroll taxes, social security and basic cost of living expenses have been deducted.
  3. You can consolidate Federal or Private student loans into one, some of these loans can graduate the payment to start out low and increase every two years assuming your income will be growing as you continue growing in your profession.
  4. Finally, loans have a standard or default repayment agreement. This is what most people end up using.  In many cases, this is the least expensive option as well.

Above are a few ideas and suggestions that can save you considerable time and money.  As always, starting a financial plan that takes every aspect of your financial situation into effect is always smart as well.  We are here to answer any questions you may have.

Written by:  Todd Rohrer, Client Advisor

These are the opinions of Todd Rohrer and not necessarily those of Cambridge, are for information purposes only, and should not be construed or acted upon as individualized investment advice.  Investing involves risk.  Depending on the types of investments, there may be varying degrees of risk.  Investors should be prepared to bear loss, including total loss of principal.  The strategies discussed herein are not designed based on the individual needs of any one specific client or investor.  In other words, it is not a customized strategy designed on the specific financial circumstances of the client.  However, prior to opening an account, Cambridge will consult with you to determine if your financial objectives are appropriate for investing in the model.  You are also provided the opportunity to place reasonable restrictions on the securities held in your account.

 

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