ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / PERSONAL FINANCE

Student Loan Repayments Could Start Soon. Here’s How To Prepare

The US Department Of Education has asked borrowers to be prepared, as the repayments will resume within 60 days, or by the end of August.
PUBLISHED MAY 26, 2023
Cover Image Source: Pexels | Karolina Grabowska
Cover Image Source: Pexels | Karolina Grabowska

Borrowers may have to start repaying their student loans soon. The Supreme Court could announce its decision on the Biden administration's sweeping student loan forgiveness plan any day. The US Department Of Education has asked borrowers to be prepared, as the repayments will resume within 60 days, or by the end of August. "The most likely scenario is repayment restarts in September," said higher education expert Mark Kantrowitz. Scott Buchanan, the executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers said that lenders are all set to prepare for the bills to restart in September. 

Biden administration has extended the pandemic-era payment pause on federal student loans several times and many are saying that this will soon come to an end as the emergencies have also ended. While getting into the routine of paying around $400 a month can be difficult, here are some steps you can take to make the repayment process smoother.

Connecting With Your Servicer Can Help

Pexels | Karolina Grabowska
Pexels | Karolina Grabowska

During the Covid-19 pandemic, several companies that service student loans announced that they would no longer lend money. So many of the borrowers will have to adjust to a new servicer when payments resume in August. As a result, almost 16 million borrowers will have to choose a different company. Check with your servicer to see if they still have your contact information so that any kind of intimation reaches you.

Find an Affordable and Suitable Repayment Option

Pexels | Karolina Grabowska
Pexels | Karolina Grabowska

Many things have changed since the pandemic and so have the laws. Student loan forgiveness is tax-free until 2025 because of a provision included in the $1.9 trillion federal Coronavirus stimulus package signed by President Joe Biden, as per CNBC. This may make things smoother for income-driven repayment plans as they often come with lower monthly bills allowing borrowers to avoid a massive tax bill at the end of the stimulus package signed into law in March 2021.

Back-Up Plan  If There's No Repayment Plan In Place

You can always put in requests for economic hardships and unemployment deferment as pointed out by experts. 

Repayment Plans

Pexels | Karolina Grabowska
Pexels | Karolina Grabowska

There are four types of federal student loan repayment schemes to choose from. You can asses and choose from these options, depending on your goals. 

Standard Repayment:  This lasts 10 years and is the best one to pay less interest over time.

Income-Driven repayment- IDR lets you pay a portion of your income and extend the length of time you're in repayment to 20 or 25 years. When this period is over one can get income-driven loan forgiveness for the remaining debt. 

Extended repayment- It starts low and then gradually increases every two years for a total of 25 years. 

Which Is the Best Repayment Option?

Well, if you want to save on interest and pay off your loans faster then the standard repayment option is the best. Also, you are automatically placed in the standard plan when you enter repayment. If you want to lower monthly payments then IDR is the plan for you. These options are best if your income is too low to afford a standard payment. You can always apply for IDR with your federal student loan servicer at studentaid.gov.

MORE ON MARKET REALIST
The woman also raised questions about the lack of transparency while listing out the spices used.
19 hours ago
The content creator was told to produce a death certificate as evidence to get membership transferred.
1 day ago
Some vintage items may be good for reselling but others could end up being more expensive.
Dec 2, 2024
The woman also urged people to refrain from abusing the policy and only return products when they are damaged.
Nov 28, 2024
Viewers were hooked to her probe and were eagerly waiting for an update about the cash.
Nov 27, 2024
There are many other codes that can indicate a number of situations and are used so that customers don't panic.
Nov 26, 2024
Scammers are coming up with new ways to make their communication via social media or email.
Nov 25, 2024
The bill with a printing error could multiply in value if it grabs collectors' attention.
Nov 23, 2024
While there could be millions of such pairs out there, only nine sets have been found so far.
Nov 21, 2024
The creator theorizes that the local wealth of the households influences how the stores look.
Nov 17, 2024
The tiny home was so easy to set up that the three friends didn't even have to read the instructions.
Nov 17, 2024
Apart from the rent, there are other factors to consider before deciding how livable a city is.
Nov 17, 2024
The winner had to pay federal, state and city taxes before taking home whatever was left of her winnings.
Nov 16, 2024
The agent was lauded for noticing and following the instructions left by the user in a creative way.
Nov 12, 2024
The TikToker pulled up a bill from two years ago using the reorder option on the app.
Nov 12, 2024
Apart from Club memberships, Plus memberships with added perks are also available at discounted prices.
Nov 11, 2024
When she initially reached out to Costco, they did not help her recover the amount.
Nov 10, 2024
Users have argued that there's more to EV owning costs than what a motorist pays for electricity.
Nov 10, 2024
Ageism also involves older colleagues being prejudiced against young professionals at the workplace.
Nov 9, 2024
The fluctuating value of cryptocurrencies is also becoming an issue for splitting the assets.
Nov 9, 2024