Take Control of Your Student Loans
To read more about some strategies to take control of your student loans, visit: https://www.consumerfinance.gov/paying-for-college/repay-student-debt/student-loan-debt-tips/#control
Income-Driven Repayment
Income-Driven Repayment plans set monthly student loan payments to a more affordable amount based on income and family size. Most federal student loan borrowers are eligible for some form of this plan. Payments can be as low as $0 a month. There are four plans offered on the Federal Student Aid website linked below.
https://studentaid.gov/manage-loans/repayment/plans/income-driven
In particular, borrowers struggling with their monthly payments should learn more about the newest IDR plan, SAving on a Valuable Education (SAVE). https://studentaid.gov/announcements-events/save-plan The SAVE plan is important to know about for a few reasons:
- SAVE offers an “interest benefit,” which basically means that if your determined payment amount doesn’t cover your accrued interest each month, the remainder of the accrued interest will be waived. This means that if your monthly payments don’t cover all your interest, your balance won’t grow over time due to interest.
- All IDR plans are based on your income, but SAVE accounts for more of your day-to-day expenses by basing payment on a smaller percentage of your income than other IDR plans.
- Beginning in February 2024, the being on the SAVE plan will offer “early IDR forgiveness” for individuals whose original loan balances were lower – see more about forgiveness BELOW.
Fresh Start for Defaulted Loans
If you have defaulted on your student loans in the past, it can have major implications for your credit score, future payment options, and other financial impacts.
You can get of Default through a few methods, but through the Fresh Start program, you can get special benefits that will help to stop collections, improve credit reporting, and make borrowers eligible for other government loans or student loans.