Not Having To Pay Now
What happens when the student loan company stops taking your payments?
QUESTION: Julie and her husband are working Dave’s plan, and she recently consolidated a student loan to get a better interest rate. They changed the plan on them, so the payments went from $260 to $130, and when they found out she was still in school, they stopped taking payments. Should they continue their old snowball or start over?
ANSWER: Just let it sit. When you get to it in the debt snowball, then pile on it. The debt snowball means you pay minimum payments on everything except the smallest debt, so in this case, it’s zero. Use that increased cash flow to pay on the other, smaller debts until they are gone, then go after the student loan. It’s going to work out in the end.