After a 42-month pause since March 2020, student loan bills are gearing up for a comeback. This break, initiated during Donald Trump’s presidency amidst rising COVID-19 concerns, has on average saved borrowers around $15,000. But come October, these bills will restart. Here’s what you should know:
Understanding Financial Challenges
Recognizing the continued financial struggles, the Biden administration will offer a 12-month “on ramp” to repayment. During this period, late payments won’t be reported to credit bureaus, and borrowers will be protected from actions like wage garnishments.
Change in Student Loan Servicers
The pandemic saw some loan servicers, like Navient and FedLoan, ceasing their roles. Now, as many as 40% of borrowers might find their loans transferred to a different company. It’s recommended to check your new servicer on StudentAid.gov and update any necessary online accounts or contact information.
Possible Changes in Payment Amounts
If you’re on the same plan as before the pause, your bill might remain unchanged. However, those on income-driven repayment plans might see alterations based on any income changes since March 2020. Additionally, the Biden administration’s new SAVE plan could reduce some payments.
As these changes unfold, borrowers are encouraged to stay updated and informed about their specific circumstances.