After a long pause due to the pandemic, student loans are quickly coming due again.
Interest accrues from September 1 for the first time since March 2020, with payments to resume next month.
Nearly 44 million Americans will soon have to start paying off their student loans.
“Three years on, a lot has changed. Students have a lot of new options, maybe loan forgiveness,” said Kelly Russell, assistant vice president for student financial resources at Fresno State University.
Kelly Russell said it’s important to use the government website Student Aid.Gov to find out where to pay.
“I think the most important thing for a student or an alumni is that their loan goes live, just to make sure they ask questions, call their loan servicer, ask questions,” Russell said.
Borrowers in need can get help, but don’t delay, said Karen McCarthy of the National Association for Student Financial Aid Management.
“So instead of panicking or burying your head in the sand and doing your research, make sure you have a repayment plan that works for you,” McCarthy said.
McCarthy said StudentAid.gov has a loan simulator that can help you understand your repayments.
“For students or borrowers who are really struggling, don’t say, maybe, think they can afford to pay anything on their student loans. They might consider an income-driven repayment plan where they would record Your loan situation. Your income level, and one of the plans can have payments as low as $0,” McCarthy said.
The latest income-driven initiative to launch next year is the SAVE program, which will: Reduce loan payments to $0 per month for low-income borrowers, and save at least $1,000 per year for those would not increase and provide early forgiveness to low balance borrowers.
The Department of Education also provides a “gateway” for borrowers.
“But they don’t report delinquencies to the credit bureaus the first year they repay, and part of that is acknowledging that everybody has to do a lot to get this engine running again,” McCarthy said.
You don’t need to start making loan payments again until after October, and that date is different for everyone.
If you have recently graduated, you will not be required to pay until approximately six months after leaving school.
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