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| How to Get Ready for the Resumption of Federal Student Loan Payments |
After a relief period of more than three years, federal student loan payments are set to resume in October, marking the end of the pandemic-related pause. The Department of Education has announced that borrowers will receive their first bill in September or October, allowing them 21 days to make their initial payment. To prepare for this transition, financial adviser Barry Glassman, the president of Glassman Wealth Services based in Tysons Corner and Bethesda, suggests a few key steps.
1. Review Your Current Budget
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| Review Your Current Budget |
Take a close look at your current spending habits and assess how you allocate your funds. Identify fixed expenses, such as rent and utilities, as well as variable expenses, like entertainment and dining out. Understanding your budget will help you make informed decisions going forward.
2. Update Contact Information
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| Update Contact Information |
Since a considerable amount of time has passed, it's essential to ensure that your loan service provider has your most up-to-date contact information. Confirm that they have your current phone number, email address, and mailing address. This step will help you stay informed about any important updates or changes.
3. Discuss Repayment Options
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| Discuss Repayment Options |
If you're concerned about handling a large bill, reach out to your loan service provider and have a conversation about available repayment options. They can provide guidance on choosing a plan that suits your financial situation. Additionally, inquire about income-based forgiveness programs if your income is lower than before the pause was implemented.
4. Take the Matter Seriously
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| Take the Matter Seriously |
It's crucial to approach the resumption of federal student loan payments with a serious mindset. Understand the implications and responsibilities associated with your loan repayment. By acknowledging the significance of this financial commitment, you can better manage your payments and plan for your future.
It's worth noting that the COVID-19 payment pause was lifted in June as part of a debt ceiling deal reached by President Joe Biden and House Speaker Kevin McCarthy. The Supreme Court also recently struck down the president's plan to cancel billions of dollars in student loan debt. Despite these developments, the Department of Education remains committed to assisting middle- and lower-income borrowers. They are expanding eligibility for low-income repayment plans and introducing a 12-month "on-ramp" starting October 1, aimed at protecting financially vulnerable borrowers from delinquency or other consequences of missed or late payments.
For more information on income-driven repayment options and other resources, visit Studentaid.gov. Stay vigilant against scammers who may attempt to exploit your student debt situation by claiming to offer assistance in lowering or canceling your loans for a fee.
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