Improve Your Student Loan Strategy With This Free Tool
Our country’s student loan debt is enormous. With a federal loan balance of more than $ 1.5 trillion, borrowers of all ages are struggling. Fortunately, the government has taken steps to streamline the repayment process. In February, the Department of Education announced new updates for StudentAid.gov. The updates are part of the president’s fiscal 2021 budget proposal to simplify student loans and repayment options.
Loan Simulator , one of the website’s new tools, offers three ways to make your student loan decisions easier. The tool will help you answer a series of questions based on your needs and goals. There are currently two scenarios and a third is being prepared.
- How to find the best repayment strategy: Loan Simulator may recommend a different plan or suggest loan consolidation. You can see how to lower your payments or how to pay off the loan faster.
- What to do if you are having problems with payments: This tool can help you figure out which option is better – to suspend or reduce your monthly payments. You can weigh the pros and cons of each option and learn how to avoid default on your student loan.
- Simulate borrowing more money (coming soon!) L If you need to borrow more, the tool can show you how it will affect your situation. You can also see federal credit limits and how your institution affects cost.
In June, the Ministry of Education released a short video demonstrating some of the features. The loan simulator bases its estimates on several assumptions. These may include details about you, your student loans and payments. You can see a detailed explanation of each of these assumptions here . While Loan Simulator is reliable, this tool has its limitations. The estimate of the payment depends on the information you provide. Keep in mind that each student loan scenario is unique and there may not be individual financial advice available in Loan Simulator. If you have any feedback, the Department of Education strongly encourages you to share it. You can ask questions, make suggestions or request a new loan for Simulator features here .