Editor's note: this article has been updated to reflect the Biden-Harris Administration's student loan forgiveness plan and extension of the student loan repayment moratorium on August 24, 2022.
On August 24, 2022, the Biden-Harris Administration extended the pause on student loan payments, interest, and collections until December 31, 2022. In addition, they implemented a landmark student loan forgiveness plan that covers up to $10,000 or $20,000 in debt relief.
If you graduated from film school with student loan debt or expect to leave with debt, don’t wait until next spring to make a plan. Here's how you can take advantage of the next four months to reduce or even eliminate your student loan debt.
The first step every film school student needs to take
To keep your film school student loan debt under control, start by calculating the exact or estimated amount you will owe after the student loan moratorium is lifted and interest rates resume. Your university’s financial aid office can help you determine a feasible maximum monthly student loan payment. If you've borrowed (or plan to borrow) private loans, which accrue interest at historically higher rates, make larger payments early will help reduce your debt. Federal loans also accrue interest, but at historically lower rates.
Let's say you borrow $20,000 in direct unsubsidized loans for your graduate film program and wait to make payments until January 2023. The current interest rate for direct unsubsidized loans is 6.54%; according to the Federal Reserve, the average monthly student loan payment is $393. That means that you'll accrue $3,487.87 in interest by the date of repayment. You can use Sallie Mae's student loan interest calculator to figure out how the interest rate will impact your finances.
Undergraduate students accrue interest at a lower monthly rate (currently 4.99%). If your parent or guardian took out a Direct PLUS loan on your behalf, be sure to include them in your financial planning.
Maximize Your Debt Relief With Biden's Student Loan Forgiveness Plan
If you received a Pell Grant and/or any federal student loans, you may be eligible for up to $10,000 or $20,000 in student loan debt relief. Borrowers who made payments may also get refunds. Read the FilmSchool.org report to find out if you qualify.
3 Common Solutions for Managing Film School Student Loans
If you’re wondering how to get out of student loan debt without paying, it isn’t impossible. But financial freedom comes with drawbacks and costs. You have three options for temporarily halting, reducing, or — in rarer circumstances — wiping away your student loans:
1. Public Student loan Forgiveness (PSLF)
You probably didn't go to film school with the intention of being employed by a U.S. federal, state, local, or tribal government or non-profit organization. But if you've accumulated excessive debt during the pandemic and expect you won't be able to catch up, the PSLF program offers student loan forgiveness after 120 payments (10 years of employment).
The most viable path for film school graduates? Working for a public college or university. Teaching film studies is an excellent way to hone your own craft, so try the PSLF Help tool to see if your institution is eligible.
2. Deferring your loans
Deferral is often a last resort for managing student loan debt. However, it's a realistic option if you have competing debt (think unforeseen medical bills), can't find a PSLF-qualifying job, or anticipate you will fail to meet your minimum student loan payments month after month.
How much student loan debt is too much? Get in touch with your university's financial aid office to determine if your monthly payments exceed what you currently earn or anticipate you’ll earn post-graduation. Be mindful that deferred student loans continue to accrue interest at the designated annual rate. If you have a federal Perkins loan, you may be able to qualify for an interest-free deferment.
3. Discharging (eliminating) your loans
For most film school students, things drastically changed since the pandemic began in March 2020. Death, bankruptcy, and disability can help you qualify for student loan discharge, or the total elimination of your loan debt. If you faced these circumstances since the start of the pandemic:
- Your parent or guardian passed away from COVID-19 or related complications
- COVID-19 resulted in a temporary or permanent disability
- The key holder of your loans suffered catastrophic economic losses
Scholarships and Repaying Student Loans
Even affordable film schools are a major financial investment. The economy is slowly recovering from the pandemic, and many film school students are struggling to find consistent part-time or freelance opportunities if they're allowed to work at all. Now is the perfect time to focus your efforts instead on applying for grants and scholarships for film school students.
The first step: submit the Federal student financial aid form (FAFSA) and apply to your film school program by the deadline. If you or your parents or guardian are unemployed or suffered financial setbacks from COVID-19, updating the FAFSA may help you avoid more debt by increasing your federal aid package. We also recommend connecting with other students who have found innovative ways to tackle film school debt and FilmSchool.org forums.
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