December 19th 2023.
It’s time to take a closer look at student loan repayment. According to the U.S. Department of Education, only 60% of 22 million borrowers had made a student loan payment by mid-November. That’s over 4 million borrowers who are now facing payments for the first time.
Experts say that if borrowers don’t act now, they will face accumulating consequences. In order to support borrowers as they return to repayment, the DOE has released initiatives to help streamline the repayment process while reducing delinquency and maintaining stability.
The 12-Month On-Ramp Process offers borrowers a temporary debt repayment program to help avoid default, delinquency, and mandatory collections. If a payment is missed before September 30, 2024, the loans will be automatically placed in forbearance.
The new SAVE Plan is an IDR that bases payments on income and family size. This plan could potentially cut payments for millions of borrowers by increasing the income exemption from 150% to 225% of the poverty line. The government will also cover any unpaid accrued interest if the full monthly payment isn’t enough. More elements of SAVE will go into effect in summer 2024, further reducing payments for borrowers with undergraduate loans.
In April 2023, the Department of Education also announced an updated wave of student loan servicers to assist borrowers throughout 2024. The loan simulator on StudentAid.gov can help guide you in choosing the best loan payment strategy for your current situation.
It’s never been easier to take advantage of student loan repayment. With the Department of Education initiatives and loan servicers, borrowers can have more time and ease to repay their loan balance. Start taking advantage of the programs today and #SAVEOnStudentDebt!
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