Reboot student loan payments; This is how you can get help

0


For 42.9 million student loan borrowers, it is 18 months with no payment. That ends in October – done or not.

The payment hiatus on federal interest-free student loans known as forbearance has been extended three times after it first came into effect in March 2020 to ease the financial blow many borrowers have suffered from the pandemic.

But with payments slated to resume in a few months, servicers – the companies that manage student loan payments – are already answering thousands of calls daily from borrowers seeking student loan help, according to Scott Buchanan, executive director of the Student Loan Servicing Alliance non-profit trade organization for student loan service providers.

Time is running out for both service providers and borrowers to prepare for repayment.

While Education Minister Miguel Cardona has hinted that extending the loan deferral beyond September 30th is not “out of the question”, borrowers should prepare for bills to be due sometime in October for now (they should be at least September 21st). Days before the exact invoice date).

TALK TO YOUR SERVICE PROVIDER NOW

Service providers expect borrowers’ demand for help to increase and may struggle to keep up. The repayment system has never been shut down before, so no one is sure what a simultaneous restart will look like for 42.9 million people.

“We have no guidance from the Department of Education on what a readmission strategy would look like,” says Buchanan. “We are in the timeframe for these plans to be communicated; it cannot wait.”

Richard Cordray, the newly appointed head of the Department of Education’s federal student aid office, told the Washington Post on May 11 that the department also planned to hold servicers accountable by setting strict performance benchmarks.

Despite the uncertainty of worrying about your solvency, there’s no downside to reaching your servicer now to help weather the onslaught, Buchanan says. Ask about the best payment management options based on your situation.

If you’re not sure who your servicer is, log into your My Federal Student Aid account to find out. To make sure you don’t miss any notifications, check that your contact information is up to date on your credit service provider’s website and on your StudentAid.gov profile.

KNOW YOUR REPAYMENT OPTIONS

“Your options are not ‘pay or default,'” said Megan Coval, vice president of politics and federal relations for the National Association of Student Financial Aid Administrators. “In between there are ways to reduce payments. Nobody, including the federal government, does not want you to default on payments.”

The default occurs after about nine months of delayed federal loan payments. This can lead to damaged creditworthiness, wage garnishments, withheld tax refunds, and other financial burdens.

– When Payments Are a Hardship: When you sign up for an income-based repayment plan, payments are set at a portion of your income, which can be $ 0 if you are unemployed or underemployed. Or you could choose to suspend payments (with interest collection) by deferring or deferring unemployment.

– If you were in default before the break: Your loans will be reset to “good condition”. If you make monthly payments on time, you can keep this status. However, if you think you are missing out on a payment or you cannot afford payments, contact your servicer to sign up for an income-oriented plan.

– If you were in default before the break: reach out to your borrower or the Department of Education standard solutions group to learn how to get into loan rehabilitation and get your reputation back.

Find a Legitimate Resource L

Service agents can be your first point of contact, but they don’t have to be your last. You may have other needs that your service provider does not meet, such as financial difficulties beyond your student loans or legal advice.

Borrowers in need of money can find free help with legitimate student loans from organizations like the Institute of Student Loan Advisors. Other student loan assistance, such as a credit counselor or attorney, will charge fees. You can find reputable credit counselors through organizations such as the National Foundation for Credit Counseling.

Financial planners can help too, but it’s best to look for one with expertise in student loans, such as a certified student loan professional.

You can find legal assistance, including advice on debt settlement and bankruptcy prosecution, from attorneys who specialize in student loans or from legal services in your state listed by the National Consumer Law Center.

If your problem is with your servicer, contact the Federal Student Loan Ombudsman Group, which will resolve disputes over government grants. You can also submit a complaint to the Federal Student Aid Office or to the Office for Consumer Protection.

AVOID CHEATERS

Legitimate student loan aid agencies will not come up with debt settlement offers through unsolicited text messages, emails, or phone calls. Most importantly, you don’t have to pay anyone to apply for debt consolidation, complete an income-based repayment plan, or apply for public service loan waiver.

“The hard and fast rule is that applying for programs (consolidation and repayment) is free,” said Kyra Taylor, student loan attorney at the National Consumer Law Center. “I think when people can see what they can do for free, it will make it easier for them to spot scams.”

And don’t fall for a company that promises to give out your student loans or wait for the government to do so – no action has yet been taken by President Joe Biden’s executive branch or laws by Congress.

___

This article was made available to The Associated Press by the personal finance website NerdWallet. Anna Helhoski is a writer at NerdWallet.

SIMILAR LINKS

NerdWallet: How to Get Student Loan Help https://bit.ly/3q1J2mF

My federal study aid https://studentaid.gov/fsa-id/sign-in/landing

National Consumer Law Center: Legal Resources of the Student Borrower Assistance Project https://www.studentloanborrowerassistance.org/resources/referral-resource/legal-resources/



Source link

Share.

Leave A Reply