4/10/2024 0 Comments Student loan payment arrangementsThe Biden administration has a new student loan repayment plan. After submitting some information, a simulator will show how much a borrower’s payments will be under each plan. Income-driven plans tie monthly payments to a borrower’s income and family size and don’t take the amount of debt or interest rate into account.Ī borrower can request to enroll in an income-driven plan online. Will that continue?Įven if a borrower was enrolled in automatic payments before the pandemic payment pause, they will likely need to reenroll by logging in to their servicer’s website.Īuto pay is optional, but borrowers will save 0.25% on their interest rate if they choose to enroll.īefore the Covid-19 pandemic, it typically took about a month or two to set up auto pay, according to Mayotte.īorrowers are automatically enrolled in a standard, 10-year repayment plan – but they can apply for several different kinds of income-driven plans that could lower their monthly payments. My payments were automatic before the pause. They should also check to make sure the servicer has all of their correct contact information. Loans previously held by those servicers have been transferred to Aidvantage, EdFinancial, Nelnet or Missouri Higher Education Loan Authority, known as MOHELA.īorrowers can log in to the Federal Student Aid website, at this link, to find out who is servicing their loans. Millions of borrowers will have a different loan servicer – the company or organization handling payments – than they did when the payment pause went into effect in March 2020.įor example, FedLoan and Navient have ended their contracts with the Department of Education within the last three years. How do I find out who’s servicing my loan? It’s worth noting that borrowers are still allowed to recertify their income and may want to do so if they have experienced a decrease in pay or increase in family size, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit that provides free student loan advice. If their income went up or down, so will their monthly payments.īut borrowers were not required to submit their income information during the pause and won’t have to until March 2024 at the earliest, according to the Department of Education. Normally, borrowers enrolled in income-driven repayment plans, which base payments on income and family size rather than debt amount, are required to recertify their income once a year. Photographer: Simon Simard/Bloomberg via Getty Images Simon Simard/Bloomberg/Getty Images/FileĪre you ready to start repaying your student loans? The US Supreme Court effectively barred universities from using race as a factor in university admissions, marking the start of a new era in higher education and rolling back decades of precedents. Widener Library on the Harvard University campus in Cambridge, Massachusetts, US, on Saturday, Aug. Unless a borrower made optional payments or other changes to their account, like consolidating their loans, federal student loans were essentially frozen in time. Generally, borrowers can expect their monthly payment to be the same as it was before the pandemic pause. Will my payments be the same as before the pause? Now, interest rates, which are fixed and vary by loan, have returned to the same rate they were before the freeze. Interest started accruing again on September 1, after rates were effectively set to 0% since March 2020 for federal student loans. Those who graduated in the spring do not have to make payments until the grace period expires, usually six to nine months after leaving school. Here’s what borrowers need to know:įor most borrowers, the first payment will be due sometime in October – but not everyone has the exact same due date.īorrowers can expect to receive their bill, listing their payment amount and due date, at least 21 days beforehand. Restarting payments all at once for so many borrowers will be an unprecedented task. The pandemic-related pause, which went into effect in March 2020, provided relief to nearly 44 million borrowers by freezing their accounts.Īfter several extensions by both the Trump and Biden administrations, the pause has finally expired after Congress prohibited the president from extending it another time. For the first time in more than three years, federal student loan borrowers will be required to pay their monthly student loan bills starting in October.
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