What if You Won't Live Long Enough to Pay Off Your Student Loans?

No one can deny that student debt is piling up at a startling rate in the United States. It has gotten to the point where those who are now legally considered senior citizens, some of them well into their sixties, are beginning to wonder if they'll literally ever live to see the day that they pay off the last of their student loans.

What happens when you're not going to live long enough to pay off your student loans? Is it ever possible to have this dreaded debt canceled altogether?

In the direst of cases, there are individuals who owe high up in the tens of thousands - and getting dangerously close to a six-figure bill. This leaves many people begging the question, was the college education and degree truly worth it in the end?

A Flatlined Repayment Plan

Those who are on income-driven repayment plans are in many cases finding their loans being transferred from one agency to another. But it doesn't matter which loan servicing agency your student loans are processed through when your Social Security payments aren't substantial enough for you to make payments. Sadly, this is the reality that an increasing number of seniors are faced with.

This has led to an outcry from people living in this kind of world, asking for a way to have their debt cancelled. Unfortunately, there is no fix-all to these types of situations.

Seniors Left Behind in Debt Relief

Using loan relief to help the right people at the right time is never an easy task
no matter how targeted an administration's strategy may be. Nevertheless, senior citizens en masse are voicing their feeling of abandonment, wondering where their debt relief is - particularly when so many other groups have be granted such a forgiveness of past student loans.

Programs for loan forgiveness have been a major part of the Biden administration as far as disabled people and veterans. To be sure, these are two highly important groups to prioritize in debt forgiveness, and these targeted programs have already provided much-needed aid to countless individuals. But this has still left much to be desired for elderly populations who have their own loans to worry about.

Finding the Right Opportunity

It is important to remember that there are currently waves of loan servicers who are both leaving and coming into this branch of the financial industry. This almost always has an impact on the way loans are handled and processed, so it's helpful for anyone paying off their debts to follow these current events in the news.

Staying cognizant of such trends in the world of finances and student loans often has a significant bearing on how well you're able to ride out these changes. While these are likely temporary shifts in staffing happening right now, major worker changes tend to occur in waves periodically. Keeping your thumb on the pulse of when and why these trends occur can help you find the most opportune moment to seek debt relief.

The Income-Driven Advantage

Repayment plans that are income-driven are generally preferable because they help keep the monthly payments at a manageable level while still chipping away at your overall debt as efficiently as possible. Income-driven repayment plans come in four different variations so you're able to find one that best suits your particular situation.

The four income-driven repayment plan types are:

  • Income-Contingent Repayment Plan (ICR Plan)

  • Pay As You Earn Repayment Plan (PAYE)

  • Revised Pay As You Earn Repayment Plan (REPAYE)

  • Income-Based Repayment Plan (IBR)

The amount of time it takes for the remainder of your debt balance to be canceled depends on the type of income-driven repayment plan you have enrolled in. This may range from 20 to 25 years.

But the good news is that even if you're paying nothing at all - in layman's terms, or to put a numeric and monetary value on it, $0 - you'll still get a boost in your credit score. This means there's no negative outcome to worry about and you're still not technically missing a payment.

Keep in mind, though: in the past, student loans and other related debts that had been forgiven were still subject to income tax. However, thanks to Congress, loan forgiveness is still exempt from taxation through the year 2025 - so there's some time left before it will become necessary to start worrying again.

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