With interest rates currently low, refinancing any outstanding loans may seem like a winning strategy. But Guy Williams, president of Gulf Coast Bank and Trust in New Orleans, says applying that strategy to outstanding student loans would be a very bad idea at the moment.
“I would give a strong no. Don’t refinance,” Williams told WWL talk-show host Dave Cohen. “There is probably going to be some sort of federal action on student loans.”
Williams says, while there always seems to be a certain amount of disagreement on every issue taken up in Washington, both sides of the aisle are leaning towards some type of action on student loan relief.
For that reason, Williams says those paying off student loans are better off sticking with their federal payment plans because refinancing with private sector companies would make debtors ineligible for federal forgiveness plans.
Williams also says, while federal loans are still in a pandemic-induced deferment mode, making sure those loans are current will be crucial for federal aid.
“If you don’t pay when it starts again, you could be ineligible for the relief that’s coming,” Williams said.
Williams appears weekly on WWL Radio New Orleans to give financial advice to listeners.
