Student loan borrowers are facing a stressful time as payment pauses and legal challenges to the Biden administration’s student loan repayment plan create uncertainty about the future. Elaine Rubin, a higher education policy expert with over 15 years of experience, acknowledges the confusion and complexity of the current situation. In light of these challenges, she offers advice on how borrowers can regain control of their student loans by taking proactive steps.
One important step is to check the total balance of your student loans to understand the amount owed, including any accrued interest. Many borrowers are surprised to find that they owe more than they initially borrowed due to accruing interest. By reviewing statements from your loan servicer or Federal Student Aid account, you can gain clarity on your loan balance. Additionally, preparing to restart payments is crucial if you are enrolled in the Saving on a Valuable Education Plan, which has been in administrative forbearance. As the plan’s legal challenges are being resolved, borrowers should be ready to resume payments.
Exploring income-driven repayment plans and comparing them can also help borrowers navigate the uncertainty surrounding the SAVE plan. By using the Department of Education’s Loan Simulator, borrowers can estimate payments and check eligibility for specific plans. Recent updates have restored the Pay as You Earn and Income-Contingent Repayment options, providing additional choices for borrowers. Furthermore, considering the Public Service Loan Forgiveness (PSLF) buyback program can be beneficial for those seeking debt cancellation through qualifying employment in public service.
For students still in school, paying off interest before entering repayment can help reduce the overall cost of loans in the long run. While it is uncertain what repayment options will be available in the future, taking proactive steps such as paying off interest can be a wise financial decision. On the other hand, borrowers should not rely solely on forgiveness as an option, as legal challenges and policy changes may impact the availability of forgiveness programs. Planning for full repayment of student loans is advised, as forgiveness is not guaranteed and could be subject to changes in the future.
In conclusion, student loan borrowers facing uncertainty due to payment pauses and legal challenges to repayment plans can take steps to regain control of their loans. By checking loan balances, preparing for repayment restarts, exploring repayment plans, considering the PSLF buyback program, and paying off interest while still in school, borrowers can better navigate the complex landscape of student loan repayment. It is essential to be proactive and cautious in planning for full repayment, as forgiveness options may change and are not guaranteed in the current environment.
