That comes after the Supreme Court struck down President Joe Biden鈥檚 plan to forgive up to $20,000 of federal student loans for eligible borrowers last month.
鈥淚 believe that the Court鈥檚 decision to strike down our student debt relief plan is wrong,鈥� the president said in a after the June 30 decision. 鈥淏ut I will stop at nothing to find other ways to deliver relief to hard-working middle-class families.鈥�
If you鈥檙e expecting to resume loan payments this fall, here鈥檚 what you need to know about repayment options and what鈥檚 ahead.
How can I check my student loan balance, interest rate and servicer?
You can check all three through logging into and . If you鈥檙e having trouble logging in, you can also call the Federal Student Aid Information Center at 1-800-433-3243.
A is also available at the Federal Student Aid website.
If you鈥檙e having issues with your account history or having trouble getting in touch, you can also to the Department of Financial Protection and Innovation, according to Celina Damian. She鈥檚 the student loan servicing ombudsperson for California, and says she鈥檚 the 鈥渁dvocate for borrowers鈥� if .
鈥淚t鈥檚 really important for them to right now know their loan, their options and then their rights 鈥� there is a for California borrowers when they鈥檙e dealing with their [loan] servicers,鈥� she said.
What if I鈥檝e never paid any of my loan balance?
You鈥檙e not alone 鈥� , over 63,000 Californians with student loan debt are 24 and younger, meaning you were probably in college or newly graduated when the student loan payment pause began in March 2020.
鈥淭here were a lot of changes during the last three years of the pandemic, so we really want borrowers to start preparing now by calling their servicers, by finding out their loan balances,鈥� Damian said.
First, you鈥檒l want to make sure your and loan servicer鈥檚 website is updated.
Your first payment will be due Oct. 1 unless you鈥檝e graduated, gone below part-time status or left school within the last six to nine months.
That repayment grace period depends on what federal loan you have. If it鈥檚 a Direct Subsidized, Unsubsidized or Federal Family Education Loan, your grace period is six months. If it鈥檚 a Perkins Loan, your grace period is nine months. (For more on grace periods, the .)
You鈥檒l learn the amount you need to pay at least 30 days before the payment鈥檚 due date, and receive a bill electronically and in your mailbox at least 21 days before then.
When you get your basic loan information 鈥� namely, your current balance 鈥� Damian says you鈥檒l be able to 鈥渇ind out what repayment plan is best.鈥�
A repayment plan can change the amount of your monthly payments. By default, everyone is signed up for the Standard Plan. But you can also switch to an , which adjusts payments based on your income and household size.
If you sign up to autopay your student loan payment balance each month, you鈥檒l also knock 0.25% off interest.
What should student borrowers in general know before payment restarts?
The Department of Education to repayment from Oct. 1, 2023 to Sept. 30, 2024 for borrowers.
Any late, missed or partial payments won鈥檛 count against borrowers鈥� credit, cause their loans to default or refer them to collection agencies during this period, though loans will continue to accrue interest. After the on-ramp ends, future monthly bills will be adjusted to reflect the impact of the additional loan interest.
And last year, the federal government for student borrowers who defaulted or were delinquent on three types of loans:
- William D. Ford Federal Direct Loan (Direct Loan) Program loans
- Federal Family Education Loan (FFEL) Program loans (both Department of Education-held and commercially-held)
- Department of Education-held Perkins Loans
That means if you weren鈥檛 eligible to sign up for an income-driven repayment plan due to defaulted or delinquent loans, you can now do so.
Damian with the California Department of Financial Protection and Innovation stressed that everyone 鈥� not just new borrowers 鈥� call their loan servicer, check their loan balances and interest and make sure all their contact information is updated before the payment pause ends.
She recommends that borrowers use the , where they 鈥渃an actually enter their information and income.鈥�
鈥淚t鈥檒l give them an estimate of their payment on each of the different [loan repayment plans],鈥� she said.
If you were already on an income-driven repayment plan before the student loan payment pause, the best time to .
While you have at least six months to do so after the payment pause ends, if your household size and income have changed since March 2020, recertifying as soon as possible ensures that the payment you鈥檙e making in October is the lowest possible amount.
If you were already enrolled in autopay 鈥� which, again, knocks off 0.25% off your student loan interest rate 鈥� you鈥檒l likely need to re-enroll, which you can do on .
Damian also cautioned borrowers , and to double-check with the Federal Student Aid Office if they receive mail addressed 鈥渦rgent鈥� or get a phone call about their student loans.
鈥淢ake sure that they are talking to reliable sources, any government ones like the DFPI, StudentAid.gov, the California Student Aid Commission, to get that information that they need,鈥� she said. 鈥淲e're not going to call borrowers.鈥�
Loan services, like applying for an income-driven repayment plan or consolidating loans, are free through loan servicers.
What other paths are there to student loan forgiveness?
Over 800,000 borrowers across the country who have been paying off their loans for 20 years or more had their . You can check your balance through your loan servicer to find out if you鈥檙e one of them.
If your school lied or misled you about the amount of debt you鈥檇 be taking on, you may qualify for a ; you might qualify for a if your school falsely certified you to receive a loan; or you might be eligible for an if you withdrew from school and the school never returned the funds to the loan servicer.
And if your school closed while you were enrolled or shortly after you withdrew, you could be eligible for a .
If you鈥檙e a teacher, government employee, public service worker, nonprofit worker or healthcare worker, you may qualify for . Under PSLF, your remaining balance will be eliminated after you鈥檝e made the equivalent of 120 qualifying monthly payments while working full-time for a qualifying employer.
The about navigating the Public Service Loan Forgiveness application.
Some teachers can also apply for , but you can鈥檛 receive credit to PSLF and TLF for the same period of teaching.
If you鈥檙e 鈥渢otally and permanently disabled,鈥� you may qualify for a to forgive the entire amount of your student loans.
Income-driven repayment plans also lead to student loan forgiveness 鈥� after payments are made over 20 or 25 years. That includes Biden鈥檚 new Saving on a Valuable Education Plan, or SAVE Plan, which the administration and called 鈥渢he most affordable repayment plan ever created.鈥�
Is the SAVE Plan available now?
No, but if you enroll or are enrolled on the Revised Pay as you Earn Plan for student loan repayment, you鈥檒l automatically be enrolled in the SAVE Plan .
Three parts of the SAVE Plan are already in effect:
- The income floor, at which a borrower will have a $0 monthly payment, is higher. It used to be the difference between your adjusted gross income and 150% of the for your family size; now, it鈥檚 the difference between your AGI and 225% of the poverty guideline amount. That means, for example, if you鈥檙e a single person in California making $32,805 or less, you won鈥檛 have to make a payment.
- If you make your monthly payment, all unpaid interest is eliminated. For example, if your loan gains $120 in interest a month and your monthly payment is $100, you won鈥檛 have to pay the additional $20.
- Your spouse no longer has to cosign your application for an income-driven repayment plan.
The Department of Education will notify student borrowers when the SAVE Plan application is available. And Californians can also to get information about repayment plans, potential forgiveness and additional student loan developments.
Copyright 20-23 CapRadio