NORFOLK, Va. — Interest for federal student loans started accruing in September, and the first payments are going to be due October 1.
It is going to impact millions of borrowers like Zach Johnson who says, “we'll manage, but we're going to have to tighten it up again.”
Other borrowers feel the same sentiment after three years of not having to pay federal student loans because payments were paused during the pandemic.
If you have student loans, you know this, but you may not know what last-minute items you need to take care of.
Christian Howton, a College and Career Success Advisor with the Access College Foundation says the first thing you should do is log into your student aid account.
“From there, you can make sure that your email, phone number, all the contact information is up to date so that you're getting the latest and greatest news from the Department of Education, as well as your loan servicer,” he says.
While it might seem obvious, Howton also says to make sure you know who your provider is.
“You may have started COVID-19 with one student loan provider, and then your loans might have gotten transferred to someone else. So, you need to make sure you know who that is,” Howton says.
After connecting with your provider, consider the available plan options.
The Access College Foundation recommends that students look at the income driven repayment plan options. Those include:
- The Saving on A Valuable Education “SAVE” plan -- formerly the REPAYE Plan
- The Pay As You Earn “PAYE” repayment plan
- The Income-Based Repayment “IBR” plan
- The Income-Contingent Repayment “ICR” plan
“Income-driven repayment plans can take into account your monthly income, and a couple other factors, and then determine kind of what you can pay per month and then spread those payments out further,” Howton says.
The SAVE plan is the newest from the Biden administration.
It is aimed to lower payments for about 20 million borrowers and so far, the Department of Education says, four million people have signed up.
If you do not know what plan is best for you, Howton says check out the student loan simulator. You can add your information or follow a prompt of questions and the software will break down what kind of payment you can expect for the different plans.
If you still need help, consider reaching out to the State Council for Higher Education in Virginia. Howton says they have a student loan advocate who can function as a liaison between borrowers and their providers.
