RICHMOND, Va. -- Despite a recent extension of student loan relief, experts suggest borrowers prepare now for repayments to begin.
"The best thing you can do right now is to set a plan forward for your repayment," Andrew Pentis, who works with LendingTree, said. "It's possible that this moratorium could be extended by the Biden administration or the newly-elected Congress. But Biden takes office on January 20 and the current moratorium is expected to end right now at January 31. So that only leaves you know less than two weeks for a decision to be made on whether the moratorium will be extended."
Pentis said that since March, millions of student loan borrowers have been given an administrative forbearance, which suspended payments and interest and stopped collections on all defaulted student loans.
He said borrowers with government-held federal student loans should not incur penalties during this moratorium.
"If you have an eligible federal student loan and you're seeing any of those negative impacts such as your credit score being affected your credit report showing and delinquent account, it's best to contact your federal loan servicers," he said.
If you are struggling to afford payments, he suggested you enroll in an income-driven repayment plan to lower your monthly payments.
"You could also pause your payments via a deferment for unemployment or other economic hardship reasons," he said.
He said hoping the government will simply wipe away the more than $1 trillion in student loan debt is not a wise option.
"There are billions of dollars worth of private student loans and student loans that are no longer in the hands of the federal government. So even if both major political parties got together and decided this is what they wanted to do, it's unlikely that we would see more than a trillion dollars actually went away."
Some lawmakers are hoping that a second stimulus bill will soon get Congress's stamp of approval and include more student loan relief working for you.