Home Business Frustrated student-loan borrowers brace for payments to resume, but they have repayment options

Frustrated student-loan borrowers brace for payments to resume, but they have repayment options

by Mark Mendoza

Student Loan Payments Set to Resume: What You Need to Know

After a series of twists and turns, student loan borrowers will soon have to resume making payments on their loans. With all the uncertainty surrounding forgiveness and repayment plans, it’s understandable that many people may feel overwhelmed. However, there are important things to know and options to explore as you navigate this next phase of your student loan journey.

First, it’s worth noting that if you miss a payment between now and next September, it won’t immediately hurt your credit. While interest will still accrue, there will be a one-year grace period after the repayment restarts, during which non-payment or deferment/forbearance requests won’t impact your credit score.

But perhaps the most crucial step you can take is to look into the Saving on a Valuable Education (SAVE) plan. This plan has the potential to significantly reduce what you owe on your student loans. For some borrowers, it may even result in a $0 monthly payment. The SAVE plan also offers loan forgiveness after 10 years of payments instead of the standard 20 years and does not charge interest on unpaid monthly interest.

CNET senior editor Nick Wolny describes the SAVE plan as the crown jewel of student loan repayment options. It aims to prevent borrowers from experiencing the frustration of watching their loan balance continuously rise despite making payments on time.

While the SAVE plan is an income-driven repayment plan, meaning it may be less beneficial for those with higher incomes, Wolny encourages all borrowers, regardless of income level, to consider signing up. In his own experience, he found that his new student loan payment under the SAVE plan was less than half of what he previously paid.

It’s important to note that in order to access the benefits of the SAVE plan, you need to enroll in it. Currently, it is a law, but there are opponents in Congress who may attempt to block its implementation. Therefore, taking action sooner rather than later is advisable to secure the potential advantages offered by this plan.

As student loan payments resume, it’s essential to stay informed and explore options that can help alleviate the financial burden. While the road ahead may seem daunting, taking advantage of resources like the SAVE plan can make a significant difference in managing your student debt.

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