June 8, 2021Tackling Credit Card Debt with Brightside
Americans hold a collective $820 billion in credit card debt spread across 505 million cards! So, when you look at your credit card bills, remember: You. Are. Not. Alone. In fact, one of the most common questions we receive at Brightside is, “Can you help me with my credit cards?” Yes, we can!
And since Brightside is available for every adult member of your household, your Brightside Financial Assistant (FA) can help design a student loan repayment plan for any college grads you live with.
Here’s your roadmap:
Make a plan
Once you can see a timeline for being able to pay off your loans, the goal becomes real and attainable, which also puts your mind at ease, because you know you can do it.
Your FA can help with this in the context of overall financial planning. Bonus tip:
You can shave 0.25 percent off your interest rate when you automate your payments through the U.S. Department of Education.
Take advantage of your summer break
While the loan freeze doesn’t end until September 30, there’s a benefit to making payments during this period: Any payment you make between now and then will go directly toward paying off your loan and not toward paying interest.
Work with your FA to figure out how much you might be able to afford in payments this summer. In addition to lower debt overall, paying down whatever balance you can now will mean lower interest fees.
Explore Loan Repayment Assistance Programs
Check to see if you are eligible for an LRAP, in which a sum is contributed each month toward paying off your student loans.
Many schools, states, and large employers offer LRAP’s. Your FA can help you figure out if you’re eligible and how to navigate the options.
Find out if you qualify for an income-driven repayment plan
There are four types of IDR plans that are intended to be affordable based on income and family size. They are:Revised Pay As You Earn Repayment Plan (REPAYE Plan)Pay As You Earn Repayment Plan (PAYE Plan) Income-Based Repayment Plan (IBR Plan) Income-Contingent Repayment Plan (ICR Plan)
For each, a percentage of your discretionary income is deducted each month over a period of time corresponding with your plan. You must apply for an IDR plan through the studentaid.gov
Read all about IDR plans here
and talk with your FA about whether or not they’re worth exploring for your particular financial situation.
Just ask for help
Paying off student loans can feel a little hopeless sometimes, especially in times of uncertainty. Just knowing that you have choices can lighten your burden.
Contact your Brightside Financial Assistant to explain your circumstances and explore your options.
Wait, aren’t loans going away?
While Joe Biden raised hopes about forgiving federal student debt while on the campaign trail, he left student debt relief out of his recently released budget. With Congress unlikely to pass even modest student loan debt in the near future, this isn’t something anyone should be banking on right now.