Even though borrowers are dreading the fact that their student loan payments will resume next month, they should nonetheless get ready now.
According to Justin Draeger, president and chief executive officer of the National Association of Student Financial Aid Administrators (NASFAA). “The time to be thinking about repaying your student loan debt is today, not waiting until the last moment” .
Draeger pointed out that borrowers who might be having financial difficulties have a number of payment choices open to them, including deferments, forbearances, and income-driven repayment (IDR) programs.
Saving on A Valuable Education, or SAVE plan, is the newest IDR program that the Department of Education is promoting. By lowering monthly payments, granting some faster forgiveness, and avoiding amounts from increasing due to unpaid interest, it improves on an earlier scheme. 4 million borrowers have signed up so far.
Borrowers should log into their accounts on StudentAid.gov and use the federal loan calculator to compare repayment plans in order to better understand which one will benefit them the best. They can also speak with the company that handles their federal student loans.
Grace Period Extended
They would need to wait though.
Borrowers won’t be penalized for missed, late, or partial payments for a full year. Without taking any action, borrowers can apply for the program.
There are two options for borrowers who have defaulted on their student loans to get out of default; one is to participate in the Fresh Start program after enrolling again in school, which will restore their accounts to good standing.
Borrowers in default have until December 31 to submit a New Start application.
Financial aid administrators are a crucial additional source of assistance, particularly for new borrowers. As borrowers graduate from college, financial aid departments are entrusted with conducting exit interviews regarding loan repayments.
According to Draeger, accredited universities that provide federal Pell Grants, student loans, and work study have pledged to the federal government that they will adhere by all rules and assist students in navigating repayment and other “complex systems even after they’ve left,”