Student Loans: Don't Wait 'Until the Last Moment' to Figure Out Payments, Expert Warns

"Borrowers may be dreading that student loan payments are restarting next month, but that shouldn't keep them from preparing now," Yahoo Finance reports.

... "'The time to be thinking about repaying your student loan debt is today, not waiting until the last moment,' Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators (NASFAA), told Yahoo Finance Live (video above). 'So reaching out, contacting your federal student loan servicer, logging into your account, and thinking about making payment arrangements now.'"

"Draeger noted that there are several payment options available to borrowers who may be struggling, such as deferments, forbearances, and income-driven repayment (IDR) plans."

"It 'will save students and families a significant amount of money if their income is not in a place where they can make payments,' Draeger said."

"To get a better understanding of which repayment plan will help them the most, borrowers should log into their accounts on and use the federal loan calculator to compare plans, Draeger said. They can also reach out to their federal student loan servicer. But they should be patient."

"'Federal student loans are being onboarded for 20 million borrowers after a 3.5-year pause. Wait times are expected to be significant,' he said, noting that the federal government has provided an on-ramp for payments."

"'So if they're not able to get through, they do have a significant amount of time to try to get through and get their payments figured out,' Draeger said."

"'Being in federal student loan default comes with a lot of negative consequences, but Fresh Start gives the opportunity to come out of default,' Draeger said. 'They just need to contact their loan servicer or their collector and let them know they want this Fresh Start. If they go back to school, the process of going back to school will take them out of federal student loan default, and they will once again be eligible for federal student aid.'"

"Accredited institutions that offer Federal Pell Grants, federal student loans, and federal work study have promised the federal government to abide by all federal regulations and help students navigate repayment and other 'complex systems even after they've left,' Draeger said."

"'Schools are held accountable for how many borrowers end up defaulting on their student loans and have a vested interest, not just altruistically, but a financial interest in helping students navigate their loans successfully and repay them successfully.'"

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: 9/17/2023

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