Hey, are you struggling to make your student loan payments, you should consider applying for student loan forgiveness in 2023. We will explain how to apply for student loan forgiveness and why it is important and how to Reduce Student Loan Debt.
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Why is student loan forgiveness important?
- Student loan debt is slowing the national economy. Forgiveness would boost the economy, benefiting everyone
- Student loan debt has disproportionately hurt black students. Forgiveness could help rectify racial inequity.
- Student loan debt has kept at least one generation of Americans from reaching essential life milestones, like getting married, buying a house, or saving for retirement. Paying off this debt would help make people healthier, more productive, and more socially responsible.
- Denying student loan debtors the benefits of bankruptcy benefits that all other debtors have access to is unfair.
You can learn more from the video below:
How to Reduce Student Loan Debt
Student loans can be a lot of burdens, but there are few ways to reduce your student loan debt.
#1. Tuition Payment Plan
Pay for college with a payment plan rather than taking on unnecessary debt. College expenses can be paid off over 9-12 equal monthly payments through tuition installment plans for a low origination fee and no interest. Without the need to take out a loan, you can instead put money aside and pay for things as you go along.
It is often a legitimate option for paying tuition at many universities. Please review the terms and conditions regarding what will occur if you are unable to maintain the required payment schedule. You may be asked to withdraw from and have transcripts withheld by some schools if you have an outstanding balance (making it a bit difficult to transfer your credits).
#2. Study And Earn Money
Students can earn money to pay for school by working part-time during the school year and full-time during the summer. If you work through the Federal Work-Study program, your income won’t be counted when you fill out your FAFSA.
#3. Pay Interest While in School
Pay the interest while you’re still in school to keep your loan balance from growing. Most student loans use the simple daily interest formula, which means that interest is calculated on your principal balance rather than any unpaid outstanding interest.
When your loan enters repayment, any outstanding interest is capitalized (added to the principal balance), resulting in an increase in your principal balance. Your loan’s interest charges will now be calculated using your new, higher outstanding principal balance.
#4. Explore all free money sources.
Before turning to student loans, exhaust all other sources of free money, such as grants and scholarships. Fill out the Free Application for Federal Student Aid (FAFSA®) and begin looking for scholarships as soon as possible.
#5. Save as much as you can before going to college.
Before enrolling in college, save as much as possible. Every dollar you save means one less dollar you’ll have to borrow. Saving is less expensive than borrowing. You will be charged interest on every dollar borrowed. Saving reduces how much you have to borrow and how much extra you have to pay back.
#6. Take advantage of refinancing.
If you refinance your federal student loans, you will lose federal benefits. Be certain of your employment status and ability to repay the new bill before proceeding.
Refinancing your student loans will not automatically reduce your debt. However, it can reduce your total repayment amount and shorten your repayment period.
When comparing student loan refinancing offers, look for those with lower interest rates and shorter terms than your current loan. This will help you save the most money while paying off your loan the quickest. This strategy will almost certainly increase your monthly payment. However, if it does not, commit to paying at least what you previously paid for an even greater benefit.
How to Apply for Student loan Forgiveness in 2023
Applications for student loan forgiveness are available, and borrowers can use this form to apply. The application requests your full name, birth date, Social Security number, and contact information.
The online application form is available until December 31, 2023 and the Department of Education intends to continue processing applications received after the deadline.
The department is in the process of converting the online form to a paper copy that can be mailed in for borrowers who do not have internet access. According to the website, these details will be released soon. This submission format has the same application deadline.
The Department of Education encourages everyone who is eligible to apply, though it estimates that 8 million people may be eligible for relief without applying due to income data already on file.
Student loan forgiveness offers relief to those who have a large amount of debt. Forgiving student loans would also stimulate the economy because it would free up money that could be used for other things. If you believe that student loan forgiveness is important, please leave a comment below and share this article on social media.