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It’s a It’s a tiring time to have student loans. Between the pay freeze and the courts challenging the legality of Biden’s SAVE compensation plan, there are many questions about what will happen next.
As a student loan professional with over 15 years in the industry, I understand the confusion. I have seen my system change, but I have never gone through a more difficult and noisy period than the system we have seen in the last two years.
With so many things in the air, how should you approach your student loan repayment plan?
You can’t control the future of loan assistance programs or managed repayment plans, but there are steps you can take to get your student loans back in control. Here are five things you can do right now – and one thing you shouldn’t.
💻 Check the amount of student loans
Do you know how much you owe on your student loans? You may have an idea (or think you do), but it’s worth checking.
Many borrowers I have worked with are surprised to find that they owe more than they originally borrowed when it comes time to begin repayment. This is because most loans, except for unsecured loans, start paying interest from the time they are issued. Outstanding interest, which has not been accrued or added to your loan, is recorded separately from the total outstanding balance. In order to properly understand how to get a loan, it is important that you review your statement carefully.
If you know who your student loan lender is, you can log into your online account to check your credit status. If you are not sure, you can find it by log into your Federal Student Aid account and visit the My Aid page.
Read more: 5 Ways to Pay Off Your Student Loans Even Faster
🗓️ Get ready now to start paying again
If you are enrolled in the Savings on Valuable Education Plan, your Debt has been enduring under control starting this summer because of the system’s legal challenges. You haven’t been able to make a payment, and your interest rate has gone to zero. This payment is temporary, and I expect it to end soon.
If you haven’t already, review your monthly budget for student loan payments.
Read more: Have and SAVE for Student Loan Forgiveness, Experts Say – With four exceptions
💰Compare income-driven repayment plans
If you’re worried about running out of SAVE or looking to adjust your budget to fit your monthly payments, it’s a good idea to check out all the plans available. You can use it US Department of Education Loan Examiner to compare your premiums and see eligibility for specific plans. This tool will help you see the available payment methods managed by cash.
Update: The department soon they reinstated the Payment Methods You Earn and Repaymenttwo IDR plans that have already been terminated. You can now apply online (if you qualify).
👩🏫 Consider the PSLF shopping program
The Public Service Loan Forgiveness Program provides loan waivers to teachers, nurses and other government employees who work in a qualifying job for 10 years and pay 120% on their loans. If you’re enrolled in SAVE and you’re about to reach 120 total payments, a late payment delay may delay your forgiveness. In this case, you can benefit from PSLF purchase program.
The PSLF buyback program allows you to “buy back” the months your loans were owed during the forbearance period – but only if doing so brings you to 120 payments.
For example, let’s say you made 115 payments before your loan went into SAVE Plan forbearance. You can apply for the PSLF buyback program to sell back five months of your past due loans to meet the 120 payment requirement. You will apply for the program online, and if approved, you will have 90 days to pay off the loan for the months you bought back. So, if your monthly income was $100, you would have to pay $500 to be exempt.
You must also ensure that you meet all of the requirements for PSLF, such as working for an eligible employer and having adequate credit. If you think you’re eligible and want to verify your salary, you can find the salary in your records. StudentAid.gov account.
Read more: Student Loan Forgiveness Is On The Way For PSLF Borrowers. What Is Next in Debt Repayment?
🎓 If you are in school, start paying interest
If you are still in college, your student loans may not have been repaid yet. While it’s difficult to predict what return options will be available in the future, there are steps you can take now.
One idea is to repay any interest earned while still in school. Even small contributions can help reduce the overall cost of your debt over time.
If you have not yet paid off your federal student loan, you are not eligible to apply yet. Revenge begins six months after graduation or if your enrollment drops below half-time, unless you enroll in another program, such as graduate school, before the grace period ends.
❌ Don’t plan on forgiveness as a one-way street
Many borrowers are turning to managed loan repayment plans to lower their monthly payments and stay eligible. student loan forgiveness. However, forgiveness is not guaranteed, especially as legal challenges continue to threaten SAVE’s restitution process. Programs like PSLF and amnesty under the Income-Based Repayment Plan are less risky, as they may require Congress to change or eliminate them altogether.
That said, it’s wise to plan to pay off all of your student loans, regardless of the forgiveness options available.
