7.8 million borrowers under 25 have total student debt of $ 115.50 billion
7.8 million people aged 24 and under currently have $ 115.50 billion in student loan debt.
According to Erudera.com, each individual borrower included in this age group has an average balance of $ 14,807.69, Department of Education data for the fourth quarter of 2020 revealed.
The average debt load of student borrowers of all ages is $ 39,351. Despite the fact that this is more than double what students 24 and under have, this group of borrowers still have years of interest piling up in front of them.
Many of these borrowers take on more debt after completing their undergraduate studies and decide to pursue further education.
Among the key things these borrowers should know and expect when looking to repay their loan in 2021 is the interest rate, which students should calculate before borrowing a loan.
Student loans start to earn interest daily after the loan is paid off. However, there is an exception to this rule, namely direct subsidized federal loans where the interest on the loan is paid by the federal government during a period when the student is still studying or when the loan is deferred.
Also, by refinancing student loans, which means that a private lender will pay off the current loan and replace it with a loan with a new interest rate, students will be able to lower the interest rate.
As for borrowers who have federal student loans and have frozen interest on student loan payments until at least September 202, they should not refinance during that time. Due to COVID-19, federal student loan payments are currently on hold; therefore, the current interest rate is set at 0 percent.
More recently, Biden’s candidate for Under Secretary of Education James Kvaal said Biden plans to cancel the student loan based on three pillars, which include:
- Cancellation of student loan due to the COVID-19 pandemic
- Cancellation of public service loan
- Cancellation for low income borrowers with high student debt
Not too long ago, the US Department of Education announced the expansion of the zero percent interest rate on federal student loans and collections of defaulted borrowers under the FEEL program. .
The ministry also announced debt relief for student borrowers who have been released due to permanent disability, a measure that guarantees borrowers that they are not required to have their debts reinstated if they have not. failed to provide information on their income in the midst of a pandemic.