Student loan payments resume
After being on hold for three years due to the pandemic, student loan repayments restarted October 1st.
Some twenty-seven million Americans began making payments averaging around $200 per month, but with inflation and rising cost of living many are looking for better payment options.
In an interview with WDIO News, financial aid directors from Lake Superior College and The College of St. Scholastica says the first thing borrowers should do is confirm who their true lender is. This will help them understand what payments plans they are allowed and avoid falling for scams. If it sounds too good to be true, it probably is.
Scott Andrews, the Financial Aid Director at Lake Superior College said “The federal government has nine different programs available for repayment. They just rolled out a new payment plan called SAVE, that is based around income and it’s adjustable based on what you earn.”
Trish Johnson, the Financial Aid Director at The College of St. Scholastica said, “A student might qualify for something called forbearance, if a student is experiencing financial hardship or a medical emergency.”
She also added that “There is something called Public Service Loan Forgiveness program. And what that entails are that it’s for students who have graduated and now work in public service. The federal government cancels out any remaining balance after a student has basically had ten years’ worth of on time payments.”
For people getting ready to go to college, both directors say you should first explore all scholarships and grants available at your institution before taking out any student loans. Also, if you must take loans make sure you are only borrowing what you need.