Student loan payments are set to begin after the COVID-19 emergency relief ends. To prepare for the restart, continue reading to learn the top five tips.
Update your information
Pull up your loan servicer’s website and your StudenAid.gov profile to double-check that your contact information is accurate. This will ensure you are kept up to date with important updates.
Consider your repayment plan
Like many people, it is very possible that your life has changed since the beginning of the pandemic. Before the student loan payments restart, be sure to consider the repayment plan that you are on. There are various repayment plans offered by the U.S. Department. Be sure the plan you are on is best for you and your circumstances.
Apply for a specific plan
If you are reconsidering your repayment plan, choosing to apply for a specific plan may help you to achieve a lower monthly payment. You can even ask to be placed on the plan that results in the lowest monthly payment amount. To do so, you can update your information to see if you can get a new, lower payment amount such as the IDR plan if your income has recently changed. It is important to explore your options to discover the plan that is best for you and your finances.
Request short-term relief
If you have searched through the possible repayment plans and none of them seem to be a good fit for your situation at the moment, you can also request to temporarily pause or lower your payments. This is done through short-term relief. It is recommended that you use a Loan Simulator to learn how this short-term relief can affect your loans and payments in the long term before taking the plunge. To request a deferment or forbearance, contact your loan servicer. Interest can still add up during forbearance and deferment. Deferments and forbearances can affect loan forgiveness options such as IDR plan forgiveness.
Learn what happens if you don’t repay your loan
Your loan becomes delinquent if you miss a payment. Delinquency will affect your credit score. If this occurs for over 90 days, your loan servicer will report the delinquency to the national credit bureaus. You can lose your access to further student aid when you default on a loan. The government can also take your tax refund, part of your Social Security Benefits, or up to 15% of your payment to pay off your defaulted loan.
Contact our experienced New Jersey firm
Werdann DeVito LLC is an experienced Certified Public Accountant firm serving clients throughout New Jersey with all of their financial needs. If you need quality assistance with accounting, tax, or consulting services, contact Werdann DeVito LLC today.