Student loan payments resume: Here’s what you need to know
Starting on Sunday, payments on student loan balances will resume after an over-three-year pause.
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The key, experts say, is having a plan so you don’t miss a payment and take a hit on your credit score.
Considering interest on student loan debt is already starting to accrue again, preparing for the important deadlines is essential.
And they are coming back, despite how many millions of people hoped otherwise.
“I just keep ignoring it,” Kevin Kincaid said. “And, you know, hoping somebody like Biden helps me out.”
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The Supreme Court struck down President Joe Biden’s cancellation plan earlier this year.
The forgiveness program would have erased $400 million in student debt, affecting about 43 million borrowers at up to $20,000 a person.
Some who already paid their loans off thought it was unfair and didn’t see a problem with payments restarting.
“Well, I’ve always repaid everything I’ve ever borrowed,” Mary Jo said. “So, I think that if you can’t pay something back, you shouldn’t take it.”
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Money lenders suggest getting organized and making a detailed list of your loans if you have not already. This includes the loan provider, outstanding balance and interest rate.
You should distinguish whether it’s a private loan or publicly funded through the federal government, and if so, the recommendation is that you set up automatic payments.
“If you do that, you’re going to receive a quarter percentage off clear interest with any federal loan,” Emily Irwin of Wells Fargo said. “Many, if not most, private loans also offer you that discount on your interest rate.”
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For help, you can research online for repayment programs such as an income-driven plan and look into what types of deferment or forbearance options may be available based on a change of circumstance over the last three years.
The Biden-Harris Administration also announced the “Save Plan” last month, an income-driven repayment that calculates costs based on the borrower’s income and family size, not their loan balance.
It will forgive the remaining balances after a number of years.
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