"Federal student loan payments are restarting after January 31st, 2022. Recalibrating your budget, switching your repayment plan, and contacting your servicer are some of the things you can do to ensure you’re repayment-ready," moneyunder30.com reports.
..."I’ve consulted Megan Walter, a policy analyst at the National Association of Student Financial Aid Administrators (NASFAA), and Amy Lynn Richardson, CFP with Schwab Intelligent Portfolios, to come up with an order of operations to help you (and me) get ready for when repayment starts."
..."Walter, from NASFAA, also recommends that every student loan borrower contacts their servicer as soon as possible, 'as they will probably be harder to get a hold of once repayment starts and more people are scrambling to get answers.'"
..."If you recently lost your job, are earning less than before payments were suspended, got married, had kids, or experienced another life-changing event that has altered your finances, it’s time to see if your current repayment plan still makes sense.
To do this, Walter recommends using StudentAid.gov’s Loan Simulator, which is 100% free.
The Loan Simulator uses your actual federal student loan balance along with your income, family size, and state of residency, among other details, to help you determine which repayment plan best suits your financial needs.
Walter also says that using this tool 'can help students decide if consolidating their student loans is a good choice based on their situation.'"
..."Both forbearance and deferment allow you to temporarily pause your payments, without being penalized.
However, there are some drawbacks. One of them is that interest will continue to accrue (aka grow and accumulate) while federal student loans are paused. Besides that, your student loan forgiveness options may also be affected. That’s why Walter stresses that loan forgiveness shouldn’t be used as long-term repayment strategies, only as 'temporary stop-gaps to keep you from defaulting.'”
NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.
Publication Date: 11/15/2021