National student loan debt jumped in the first quarter of 2022 to $1.59 trillion, according to the latest household debt report from the Federal Reserve Bank of New York.
The $14 billion increase from the fourth quarter of 2021 marks a new record and represents about 10% of total household debt, the New York Fed said. It is the second highest category of consumer debt, behind mortgages.
About 5% of total student loan debt was 90 days more past due or in default in the first quarter. About 1.05% of student loan debt went into default in the first quarter, the report said, up from 1.02% from the first quarter of 2021.
If you have a private student loan, it would not qualify for student loan forbearance programs, but refinancing could help lower your monthly payments. Visit Credible to find your personalized interest rate without affecting your credit score.
BIDEN SAYS HE PLANS TO CANCEL STUDENT DEBT, BUT NOT $50,000
Biden plans to forgive $10,000 in student loan debt
The news of rising debt balances comes as President Joe Biden has said he plans to forgive some student loan debt, but not the $50,000 cut some Democrats had hoped for.
“I am carefully considering whether or not there will be additional debt forgiveness and I will have a response on that within the next two weeks,” Biden told reporters at the White House on April 28.
Federal student loan repayments are currently on hold until August 31, 2022, the fourth time the Biden administration has postponed federal student loan repayments. When he announced the pause on April 6, the president said the resumption of payments in May would have resulted in millions of borrowers facing “significant economic hardship” and that “delinquencies and defaults could threaten the financial stability of Americans”.
Former White House press secretary Jen Psaki added during an April 25 press briefing that Biden “will make a decision on any student debt cancellation before this pause on student loans concludes.” .
Private loans are not eligible for the COVID-19 forbearance program or student loan forgiveness. If you want to lower your monthly payments, consider refinancing your loans to lower your interest rate. Visit Credible to compare multiple lenders at once and choose the one with the best interest rate for you.
BIDEN MORE OPEN TO CANCELLATION OF STUDENT DEBT ‘THAN EVER BEFORE,’ SAYS SCHUMER
How you can pay off your student debt
There are several ways to pay off your student debt or lower your monthly payments to better manage your student loans. Here are some ways to navigate the refund:
1. Take out a mortgage refinance with withdrawal
Residence prices have skyrocketed dramatically over the past year, and many homeowners are now seeing unprecedented levels of home equity. Therefore, some homeowners do cash refinances to pay off student loan debt. This could significantly lower your interest rate, help you pay off debt faster, and consolidate your payments.
In fact, some mortgage lenders have specific programs designed to help borrowers repay their student loans. If you want to compare your options, visit Credible to be prequalified for a mortgage refinance in minutes.
2. Refinance your student loans
If you have a federal student loan, refinancing could disqualify you from the student loan forgiveness or federal forbearance programs. However, borrowers of student loans from private financial institutions could lower their monthly payments by refinancing and lowering their interest rates. If you are interested in seeing your refinancing options, contact Credible to speak with a student loan expert and get all your questions answered.
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