Student loan payments begin this month for more than 40 million borrowers
ROANOKE, Va. (WDBJ) - Millions of borrowers are budgeting to repay their student loans this month.
The student loan payment pause officially ended in September, with payments set to begin in October. Interest started accruing back up on September 1, when the pause ended.
Everyone’s payment date is different depending on your loan provider. A Virginia student loan advocate recommends you get ready for that first payment if you haven’t already.
“95% of borrowers with federal loans took advantage of the administrative forbearance that was offered,” Scott Kemp said.
Loan providers have to notify you when your first payment is due at least 21 days in advance. If you haven’t received a notice yet, Kemp explained it may be in your email or your loans aren’t due until the end of October.
“The best thing to do is if the borrower doesn’t know who the loan servicer is or where to go, is go to studentaid.gov,” Kemp said. “With 40 million people all starting up at once, I’m concerned that borrowers are going to have to wait long times on the phone. What we’re recommending is patience and persistence.”
Borrowers can also apply for the ‘Save Plan’, which bases your monthly payment on 5% of your income. Kemp explained this is a good option for short term savings, but interest will build up over time.
“Public loan forgiveness has gone through some modifications in the last year and a half,” Kemp said.
If you are having trouble making payments, you can also apply for the ‘On Ramp’ program, which gives eligible borrowers a grace period until September 2024.
“Their [borrowers] loans aren’t going to go into default or collections, but borrowers have to opt into that program,” Kemp said. “One key caveat is that this is not the same administrative forbearance that has been happening for the last three and a half years where interest did not accrue.”
Anyone who enrolled in an auto payment plan before the pandemic will have to re-enroll in a new auto pay set up with their upcoming monthly payments.
Experts are warning borrowers to be aware of loan forgiveness scams. Loan providers will never ask you for your username and login over the phone.
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