Student loan debt is one of the worst souvenirs a law school graduate can take on as a reminder of their alma mater. Without taking six figures in loans, many hopeful lawyers wouldn’t be able to attend their dream (or fall back) schools. At the time of signing, the focus is usually on repaying the principal — now that I’ve borrowed $100k, how will I pay the $100k back? As you pay your payments and life catches up to you, the focus is usually on figuring out how your debt grew to $130k after several years of on-time payments. It’s the compounding interest that gets you. SAVE stepped in as a lifeline to troubled debtors: it brought some forbearance and lightened the weight of that compounding interest we’ve all grown to loathe so much. As great as it was while it lasted, the start of August brings with it the end of SAVE saving you from compounding interest. CBS has coverage:
Millions of people with student loans who had signed up for a Biden-era repayment plan will start seeing interest accrue to their accounts starting today, Aug. 1, a change that could result in an additional $300 in monthly costs for the typical borrower, according to one analysis.
…SAVE enrollees can opt to remain in forbearance, which means they won’t need to make monthly payments, but “the most significant impact is that your total loan balance will start growing again” because interest will resume, Bethany Hubert, a financial aid specialist at lender Earnest, told CBS MoneyWatch.
In short, damn it.
The good news is that if you could make it through Federal Courts, you can figure out the theory behind paying off your student loans. A practical approach would be to stay up to date with your payments and pay off the minimum balance every month. If you can afford to drop a little extra money in your servicer’s coffers, see which debt will cost you the most in the long run and pay that one down the most aggressively. Typically that looks like finding the debt with the highest interest rate on it and paying that one down, but your specific situation may vary.
Best of luck paying down your student loans, especially to people who were on a public service route for loan forgiveness and got screwed over. Funny, they still managed to budget in some loan forgiveness to ICE agents. Wild priorities.
Student Loan Interest For Millions Resumes Today. The Average Monthly Payment Could Rise $300. [CBS News]
Chris Williams became a social media manager and assistant editor for Above the Law in June 2021. Prior to joining the staff, he moonlighted as a minor Memelord™ in the Facebook group Law School Memes for Edgy T14s . He endured Missouri long enough to graduate from Washington University in St. Louis School of Law. He is a former boatbuilder who is learning to swim, is interested in critical race theory, philosophy, and humor, and has a love for cycling that occasionally annoys his peers. You can reach him by email at cwilliams@abovethelaw.com and by tweet at @WritesForRent.
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