In an effort to provide some relief during these tough times, the U.S. Department of Education has told student loan borrowers they can wait to resume making payments until 2021. However, for the millions of Americans with private student loans, bills are still due; even though they are struggling to get by, as COVID-19 restrictions continue and work is altered or at a standstill – relief is needed now.
As of now, the private student loan market sits at $130 billion. According to the Student Borrower Protection Center, it has grown more than 70% over the last decade. In fact, at the end of last year, Americans owed more in private student loans than they did for payday loans and past-due medical debt.
Although the government has not offered a solution for those with private student loan debt amid the pandemic, there are still options available. Here are a few steps and ideas if you are one of the many looking for solutions to private student loan debt during these times:
Reassess your budget – First, look closely at your expenses. Are their area you can cut back on? Cancel subscription services? Gym memberships? Lower phone bills? Is working remotely from home an option, so you can lower car-related expenses? See if there are ways you can reduce your monthly expenses and adjust your budget to free up some additional cash.
Take on a side hustle – Of course, times have changed drastically during the months of COVID-19, but some industries have experienced real growth. The food-delivery industry, for example has seen rapidly increasing demand. See if there are any opportunities within these industries that can help you increase your income and manage your expenses and debts.
Refinance loans – This option is most recommended for those who have high-interest rate loans. At the moment, interest rates are at record lows. So, it could be a good time to consider refinancing your student loans. (Keep in mind, it will likely involve needing a good credit score and a low amount of outstanding debt.)
The biggest thing to avoid for your future financial health is defaulting on your private student loans. Default can remain on your credit report for years. This will then damage your ability to borrow for a home, car, or rent on an apartment. No matter what kinds of loans you have, there are options available. Just make sure you choose an option that preserves and protects your future financial health.
Author Bio: Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated payday loan merchant account processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.