Ready or not here come student loan payments! After a three year pause on payments for Federal student loans, repayment is starting in October. Interestingly, loan interest will start accruing again on Federal student loans as of September 1, 2023. What does this all mean for you if you have a Federal student loan?
First, you should communicate with your loan servicer. Payments are resuming in October, but your payment due date may have changed. You will want to contact your servicer and confirm when exactly your payment is due.
Second, don’t expect any further forbearance or extension from the White House on loan payment pause at this time. This new payment timeline was a provision in the debt ceiling deal reached with Congress.
Third, if you graduated between 2020 and now, this could be your first ever student loan payment. You need to be prepared by knowing your servicer, due date, and amount. Make sure you are ready.
Fourth, don’t wait or skip payments hoping for the Biden administration’s loan forgiveness. This issue is still with the Supreme Court and there has been no ruling. Loan forgiveness is not a guarantee so be sure you are ready to make payments. Missing payments can damage your credit score.
Finally, if you are having trouble making those payments, you have some options. Consider asking for a deferment if you qualify. During deferment (unlike forbearance) you shouldn’t accrue interest. If deferment is not in the cards, consider forbearance but keep in mind that interest will continue to accrue. If neither of those options work, consider an income-driven repayment plan based on income and family size. These are generally offered in two flavors: Pay As You Earn and Revised Pay As You Earn. Both can help reduce your monthly payment (potentially to $0) depending on your income situation and family size.
As an independent Certified Financial Planner™, I can help you figure out an approach. Contact me and let’s get started! #talktometuesday #education # #financialsavvy #stressfree #savings #moneyeducation #financialeducation #CFPPro #studentloan #federalstudentloan #payment