{"id":25540,"date":"2021-12-23T22:31:00","date_gmt":"2021-12-23T22:31:00","guid":{"rendered":"https:\/\/fsv.mysites.io\/?p=25540"},"modified":"2022-01-02T22:34:24","modified_gmt":"2022-01-02T22:34:24","slug":"us-stocks-are-expensive-copy-copy-copy-2-copy","status":"publish","type":"post","link":"https:\/\/fsvllc.com\/us-stocks-are-expensive-copy-copy-copy-2-copy\/","title":{"rendered":"What To Do With The Student Loan Payment Pause Extension?"},"content":{"rendered":"
\n\"Forbes\"\n

Mark Kantrowitz, Contributor<\/p>\n

Dec. 23, 2021<\/p>\n

The U.S. Department of Education announced today that it is extending the payment pause and interest waiver through May 1, 2022 to give it time to evaluate the impact of the Omicron variant on borrowers and the economy. Borrowers have a few options for using the financial relief afforded by the extension.<\/p>\n

The payment pause and interest waiver saves the typical borrower about $100 a month in interest.<\/p>\n

A key risk of the new extension is that nobody will believe that repayment will restart on May 1 after the previous extension was labeled as the “final” extension. There’s always going to be another virus variant of concern.<\/p>\n

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Though, fear of the virus, as opposed to the virus itself, might contribute to a self-fulfilling prophecy of an economic retreat.<\/p>\n

As Franklin D. Roosevelt said during his inaugural address, “the only thing we have to fear is fear itself – nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”<\/p>\n

A further extension of the payment pause and interest waiver is not really needed. Unemployment rates for college graduates have normalized. Among borrowers who weren’t eligible for the payment pause and interest waiver, deferment, forbearance and default rates have returned to pre-pandemic norms. Delinquency rates are better now than they were before the pandemic.<\/p>\n

Nevertheless, the three-month extension provides borrowers with more time to prepare for the restart of repayment. They can save the money to make it easier to resume making payments on their student loans. They can pay down higher-interest debt that isn’t paused, such as credit card debt. They can use the money to build or bulk up their emergency fund.<\/p>\n

Borrowers should also take a few steps to ensure a smooth transition to monthly student loan payments:<\/p>\n

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