What To Know About Resuming Student Loan Payments

August 2023 | Category: Newsletter

NOTE: As with all things, we advise you to be aware of scammers claiming you qualify for debt forgiveness. It is important to work directly with your loan servicer or a partner like GreenPath to assist you with any student loan questions. 

Since the start of the Covid-Pandemic, student loan repayment has been a question for everyone’s budget. However, it was recently announced that federal student loan payments would resume this fall. Add to it the recent Supreme Court decision striking down the forgiveness plan announced in late 2022, many people are scrambling and concerned about what comes next with student loans and their already stretched budgets.

Although payments don’t officially resume until October 2023, there are important steps to take now to prepare. We have compiled several resources to help you be a voice of guidance and clarity as people seek to understand their options and next steps:  

1. Our partner, GreenPath, is hosting a special webinar for students and other borrowers to learn more about the resumption of payment situation.
2. Take stock of all your student loans to help get yourself organized.  To get current loan balances, log onto the National Student Loan Data System (NSLDS). The portal will display how much you borrowed, the type of each loan and interest rate, payment history, and the current loan servicer for each loan. If you have a private student loan, the best way to know which loans are still open is to claim one of your free annual credit reports at AnnualCreditReport.com.   
3. Check your budget to ensure you’ll be able to pay the resuming payments. After a lengthy payment pause, consider overall affordability. Based on your current monthly income and expenses, you might find that resuming payments for federal student loans will stress your budget. 
   • Explore options to lower monthly payments by switching to an income-driven repayment plan.
   • Private student loan lenders typically don't offer income-driven plans, but they might offer alternative repayment plans on a case-by-case basis.
   • Loan forgiveness might be an option. Teachers, nurses, first responders, service members, those working in non-profit hospitals and other nonprofit and public service workers can potentially have their student loans forgiven.
   • To explore whether you can take advantage of public service loan forgiveness program, visit: StudentAid.gov.
4. Brush up on the updated SAVE plan. The Saving on a Valuable Education Plan increases the income exemption from 150% to 225% of the poverty line, resulting in potentially lower monthly payments. This Plan replaces the existing Revised Pay As You Earn (REPAYE) Plan. Borrowers on the REPAYE Plan will automatically get the benefits of the new SAVE Plan. Get the full details from the Federal Student Aid website.
5. After review, determine if free student loan counseling may make sense for your situation. Our partner, Greenpath is here to help all our members (and non-members) improve their financial situation. Just go to our shared website to schedule your confidential discussion with a trained expert on student loan financing options.

It is important to know all of your options and prepare yourself for upcoming financial changes. Our team is available at any of our branches or you may connect with our financial counselors at Greenpath.