Student loan borrowers feel unprepared as payments restart, experts urge use of income-driven plan

Talia Kirkland
·2 min read
8

After a three-year hiatus, student loan repayments begin in a month. Many borrowers Channel 11 spoke with say they simply aren’t prepared, but will have to make do.

“Everything is expensive now, and just to add on an additional cost right now is just crazy,” said Stenetta Jones, a student loan borrower.

Experts are now urging anxious borrowers to check out the new federal relief program. It’s an income-driven repayment plan that helps borrowers lower their payments.

“This was just launched by the Biden administration and what it does is it caps your monthly payment to no more than 5% of your discretionary income,” said Jennifer Finetti, the Director of Student Advocacy at Scholarship Owl.

It’s a huge sigh of relief for moms like Ciji Chester, who just enrolled her daughter at the University of Pittsburgh, but is also still paying off her own student loans.

“It’s just more debt, more debt, and it is a lot of hardship on the household,” Chester said.

Stennetta Jones and her husband have $70,000 of student debt.

Their first payment will be in October, and loans begin accruing interest again on Friday. They were hoping for some type of loan forgiveness.

“I feel like it should have been extended a little bit longer, maybe an additional year just for everybody to kind of get back on track since COVID has been officially over, but not really,” Jones said.

But with no student debt forgiveness in sight and the repayment day looming, experts say the new relief program will help if you can only make partial payments, or if you need to miss a payment.

“For the next 12 months, the Biden administration is preventing loan services from reporting you to the credit bureaus,” Finetti said.

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