That’s not to say there is no hope — it’s possible some kind of forgiveness plan still happens or Biden continues the payment moratorium.
“While loans are set to resume after the first of the year, I could very likely see the administration extending the pause on student loan payments until the forgiveness plan has made it through the legal process and there is a definitive conclusion,” said Kyle Hill, owner of Hill-Top Financial Planning in Kansas City, Missouri.
Build Up Cash Savings
For those able to do so, socking away extra cash might be wise.
“If I had student loans, I would be saving in an account towards them just in case they do not end up getting forgiven,” said Thomas Kopelman, co-founder and financial planner at AllStreet Wealth in Indianapolis.
One option is to set up a separate bank account for cash slated to be used on student loan payments, if and when they’re required, and then pay yourself each month.
There are currently some appealing options for keeping cash liquid while still earning interest. High-yield savings accounts are now boasting increased rates, with Goldman Sachs Group Inc.’s Marcus offering a 3% annual percentage yield.
“You want to be in the habit of making those payments and how it affects your budget,” Hill said. “The best time to do that is now. It’s like practicing for the game.”
--With assistance from Ella Ceron.
This article was provided by Bloomberg News.