What’s better than taking a loan out for college? Not having to pay it back! Welp, that all turned out to be one big fever dream we’re still groggy from. 🫠💰
If you enjoyed that sweet pandemic payment break, buckle up…and get your budget ready. They’re turning the student loan payment machine back on and it’s hungry. So hungry, it could reach right into your paycheck for a quick lunch (dead serious). 😱
Here’s Five Fast Facts on student loan repayment:
- 🎓 Biden Our Time - Back in the Biden days, the administration tried to put plans in place to forgive or erase student loan debt for millions of borrowers. However, the Supreme Court said hell-to-the-no and the Trump administration is turning the payment machine back on. Payment collections are set to resume May 5th.
- ❎ No Pay Party - Over 42 million borrowers hold federal student loans and their debt totals a whopping $1.6 trillion in debt. Out of those borrowers, the Department of Education says over five million haven’t made a payment in the last year.
- 💸 Check, Please - Anyone with loans in default will get an email confirming their status prior to May 5th. They may also get referrals to debt collectors. If borrowers don’t resume payments by the summer, the government may start deducting the money right from paychecks.
- 📉 Settle the Score - People who benefited from the pandemic payment pause might be in for a rude awakening. If borrowers can’t make the payments, their credit scores could tank, setting them up for financial hardships down the road. A low score makes it tougher to buy or rent a home, get insurance, or open new credit cards.
- 🚨 Default Dance - How do you know if you’re in the default danger zone? If you haven’t made a payment in 90 days or more, you’re considered delinquent. If you continue to not pay, you could then go into default. The number of days may depend on your loan. For example, if you have a loan under the Federal Family Education Loan Program, you’re in default if you don’t pay for 270 days. To get more details, check out the official StudentAid.gov website.
🔥Bottom line: If this news has you stressed, take a deep breath - you have options! On the StudentAid.gov site, there’s a list of action steps to take depending on your unique situation. If all else fails, change your name and go off grid (KIDDING).
Do you have a ton of student loan debt?
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