ROANOKE, Va. – It’s a moment those with student loans have been dreading – payments are one step closer to resuming.
After a three-year pause on federal student loan payments, Friday will mark the first significant step toward restarting the process: borrowers will once again see interest accrue on their loan balances.
Scott Kemp is a student loan advocate with the State Council of Higher Education for Virginia. Kemp said one thing every person should make sure they know is who their loan servicer is.
“Log into their studentaid.gov account to make sure that they know who their loan servicer is and to set up a direct connection to make sure that loan servicers knows their [what] current email address is … how to contact them,” Kemp said.
Another tip for people is to learn what is the best repayment plan for their situation. Studentaid.gov has a loan simulator that helps determine the best scenarios.
“It will point you in the right direction and tell you that this is your lowest payment option or this is the one that pays it off as quickly as possible,” Kemp said.
One of the new income-driven repayment options is called the SAVE Plan. Under the SAVE Plan, a higher percentage of people’s discretionary income – the money left over after basic necessities such as rent and food – will be shielded from loan payments, resulting in lower monthly bills.
As is the case with other income-driven plans, once a borrower makes good on those payments for a set amount of time, usually between 20 and 25 years, the remaining loan is forgiven.
Kemp and other student loan experts want to warn people against scams as they expect more people to hear from scammers trying to convince people of ‘more relief’ or ‘paying faster.’
Kemp said there is no grand relief program as of now after the Supreme Court blocked the Biden administration’s relief plan.
“If something else happens down the road, it’s a gift. At this point you need to prepare for the certainty that payments are restarting,” Kemp said.
Studentaid.gov has a list of other tips for people to be ready for the repayment to resume.