Advice: She paid off student debt days before relief announced. She has no regrets.
She took advantage of the payment pauses enacted during the pandemic to pay off $12,000 in loans interest-free. Although there had been discussions at the time about loan forgiveness, Young said she wasn’t waiting to see if it would happen.Young’s daughter graduated from the
Now that the loan forgiveness plan has been announced, some regret their aggressive debt reduction. They are taking advantage of a loophole allowing them to claw back their payments and put the refunded loan amount back on the lenders’ books so they can then apply for forgiveness under Biden’s plan.While they took advantage of the zero-interest relief, these borrowers now want to benefit from this newest loan forgiveness.
Many people requesting refunds intending to take advantage of Biden’s loan forgiveness are not struggling financially. They didn’t lose their job during the pandemic. They had more disposable income because pandemic shutdowns reduced their spending on eating out or other discretionary expenditures, freeing up money to pay off their loans.Should you take advantage of the refund loophole?But, as a taxpayer who will be footing the bill for this new loan forgiveness, I appreciate Young’s decision.