Throughout college, I was fortunate enough to be eligible for my school’s low-income scholarship program, which ensured that my college costs (tuition, fees, room expense, etc.) would be 100% covered with a combination of grants and small federal loans.
Grants covered the majority of the cost, but I still needed to take out $10,500 in federal subsidized loans to pay for my living expenses (rent and utilities) for 4 years, and I had part-time jobs to cover all my other expenses (food, gas, etc.)
The plan was that after I got a job, I would start paying back my student loan like most people would do. However, due to the Covid-19 pandemic, student loan repayment was deferred until now.
Taking advantage of the time when interest is 0% and no repayment is required, I’ve been investing my money elsewhere because the opportunity cost is greater than if I were to pay down my student loan!
August 24, 2022, President Joe Biden announced a new student debt relief plan, which would cancel student loan debt up to $10,000 for individuals making less than $125,000 per year ($250,000 per year for households) or up to $20,000 for individuals who received Pell Grant.
Because I make less than $125,000 per year and received a Pell Grant when I was in school, my $10,500 student loan would be canceled by this relief program.
Needless to say, this gave me a huge relief. I won’t have to budget for student loan repayment, will retain more of my paycheck, and essentially have more money to invest!
Obviously, there are mixed political views on this announcement, but I will not discuss my opinion here 🙂 Nonetheless, this directly aligns with my financial goal, so I will take all the pennies I can get!