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Let’s talk student loans

Individuals 08.31.2022 3 MIN

On August 24, President Biden announced a monumental step in student loan forgiveness.

If you’ve got federal student loan debt—and 45 million Americans do—the pause on repayment has offered respite, but also uncertainty while awaiting specifics on the path forward. Here’s what we know:1

  • Up to $10,000 of undergraduate student loan debt will be forgiven
  • Up to an additional $10,000 of debt will be forgiven for Pell Grant recipients
  • The total debt forgiven won’t exceed the amount still owed
  • To qualify, individuals must earn $125,000 or less in gross income
  • The pause on student loan repayment has been extended through December 31, 2022 and will not be extended again  
  • When loan repayments resume, the monthly payment will be capped at 5% of monthly income (instead of the current 10% of monthly income cap)


Looking ahead

For many, student loan payments can be a significant bill to pay each month—the average student borrower pays $300 per month on undergraduate student loans.2 Graduate and professional school loans can make monthly loan payments even steeper.

While the pause on repayment has been helpful for many, and the newly announced loan forgiveness offers more relief, there will come a day for many when loan payments will be required again. Here’s how you can prepare in advance.


Smart steps you can take before loan repayment begins

  • Reacquaint yourself with your current federal student debt. Make sure you know your balance, how long you will need to make repayments before your loans are paid off, your interest rate and repayment type
  • Explore your refinancing options for any debt beyond the amount that will be forgiven. Consolidating your loans with one lender may result in a lower interest rate. Your interest rate will be based on your credit score and current interest rate environments
  • Work on your credit score. One way to do so is to pay off other debt like high interest credit cards. This will help improve your credit score so you can take advantage of lower rates should you choose to refinance any remaining debt
  • Plan for your loan payment in your monthly budget now. You can use your monthly repayment amount to pay down other debt or earmark for savings, which will boost your emergency fund or help you achieve a goal


A Financial Wellness coach can help 

Exploring all of your options and making sound decisions about student loan debt can make a big difference over the life of a student loan. If you have access to Goldman Sachs Ayco through your employer, your Financial Wellness coach can help you develop an approach that works for you. Billy, who’s been a Financial Wellness coach for four years, shared this story of helping a client refinance her student loans

“I spoke with a client who recently graduated with significant student loan debt. She'd only been working for a month when we first spoke. On our first call, we worked through her spending and debt. I encouraged her to explore options for refinancing her private student loans to potentially lower her interest rate and payment which could help kick-start her finances. I let her know an easy place to start is on our Marketplace, where there are curated solutions available.”

She found an option that cut her loan interest rate in half, freeing up over $500 per month.”

You made an investment in yourself with your education. Now make sure you have a plan in place to pay your loans back.

If you have access to Goldman Sachs Ayco through your employer, connect one-on-one with your Financial Wellness coach to understand and maximize your options. Your discussions are completely confidential and there’s no cost to you. 






If you have Ayco as a company benefit, register, log in or download our Goldman Sachs Wellness app to learn more about this and other financial wellness topics.


Advisory services offered by The Ayco Company, L.P. d/b/a Goldman Sachs Ayco Personal Financial Management (“Ayco”). Brokerage services are offered through Goldman Sachs & Co. LLC and Mercer Allied Company, L.P. (a limited purpose broker-dealer), both affiliates of Ayco and members FINRA/SIPC.