Borrowers will start making repayments on student loans in a couple of weeks
EAU CLAIRE, Wis. (WEAU) - Time is running out for student loan borrowers trying to figure out repayments.
“Oh, obviously, like everyone else I’m super looking forward to it. Just kidding. I am a little nervous, just because it’s a lot of money that the government is asking,” said Krista Leistikow.
She like millions of Americans are concerned about making that first payment in October. She herself graduated 8 months ago, only a fraction of the more than 3 year COVID-era pause.
Borrowers benefited from the COVID-era pause, but there are ways to get back into paying back loans, easing the financial burden.
“There really are two different kinds of payment plans. There’s a new income driven repayment plan called SAVE through the Biden-Harris administration,” said Nicole Andrews, the University of Wisconsin Eau Claire financial-aid director. “The other option is to pay based on a number of years and how much you owe in total.”
She said before worrying about a payment, borrowers need to figure out who even has their loans. That is because federal loan servicers have moved loans to other servicers in recent years.
“There are a lot of folks that have no clue who the loan servicer is. And the way you can do that, go to student aid dot gov. And on there, there’s a dashboard and you can actually see who your loan servicer or servicers are,” said Andrews.
There could be challenges to get on the affordable repayment plan. The Federal Student Aid website having recommended borrowers apply for the income driven repayment plan by mid-August.
“I think the dilemma people are facing is those loan servicers are really busy right now,” said Andrews. She recommends to try and apply anyway. “Because even if it’s not captured in the first payment, maybe it will on the second or the third, and I would imagine anything would be helpful.”
“I know there are some programs out there that can make it a little bit of an easier process. But, I’m really not looking forward to it in the end,” said Leistikow. Instead, she had looked forward to saving for her future. “But now that has to be put on pause and I have to stay in a small apartment while I work my way up to get the money to pay back the student loans before I can move on and have an adult life.”
The Biden Administration also introduced an “on-ramp” policy for borrowers. It protects them from negative impacts from missed payments on loans. However, it only applies to student loans that were eligible for the COVID-era pause.
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