It’s been a stressful time to have student loans. Between payment pauses and the courts disputing the legality of the Biden administration’s SAVE repayment plan, there are many questions about what will happen next.
Elaine Rubin, a higher education policy expert
As a student loan expert with more than 15 years of experience in the industry, I understand the confusion. I’ve witnessed my fair share of program changes, but I’ve never been through a period more complicated and tumultuous than the policy tug-of-war we’ve seen over the past two years.
With so many factors up in the air, how should you approach your student loan repayment strategy?
You can’t control the fate of debt relief programs or income-driven repayment plans, but there are steps you can take to regain control of your student loans. Here are five things you can do right now — and one thing you shouldn’t do.
💻 Check your student loan balance
Do you know how much you owe in total on your student loans? You might have an idea (or think you do), but it’s important to check.
Many borrowers I’ve worked with are surprised to find they owe more than they initially borrowed when it’s time to start repayment. This is because most loans, except subsidized ones, begin accruing interest from the moment they are disbursed. Outstanding interest, which has not been capitalized or added to your loan, is listed separately from the principal balance. To fully understand your loan balance, it’s important to carefully review your statements.
If you know who your student loan servicer is, you can log into your online account to check your balance. If you’re not sure, you can find out by logging into your Federal Student Aid account and visiting the My Aid page.
Read more: 5 Ways to Pay Off Your Student Loans Even Faster
🗓️ Prepare now to restart payments
If you are enrolled in the Saving on a Valuable Education Plan, your loans have been in an administrative forbearance since this summer due to the plan’s legal challenges. You haven’t been able to make payments, and your interest rate has been set to zero. This payment hold is temporary, and I expect it to end soon.
If you haven’t done so already, reevaluate your monthly budget to accommodate your student loan payments.
Read more: Stay With SAVE for Student Loan Forgiveness, Experts Say — With 4 Exceptions
💰Compare the income-driven repayment plans
If you’re worried about SAVE disappearing or looking to adjust your budget to include your monthly loan payments, it’s a good idea to explore all available repayment plans. You can use the US Department of Education’s Loan Simulator to estimate your payments and check eligibility for specific plans. This tool will let you explore available income-driven payment options.
Update: The department recently restored the Pay as You Earn and Income-Contingent Repayment options, two IDR plans that were previously phased out. You can now apply for them online (if you’re eligible).
👩🏫 Consider the PSLF buyback program
The Public Service Loan Forgiveness program offers debt cancellation for teachers, nurses and other public service employees who work in a qualifying job for 10 years and make 120 payments on their loans. If you’re enrolled in SAVE and were close to reaching your 120 total payments, the recent payment pause may have delayed your forgiveness. In this case, you might benefit from the PSLF buyback program.
The PSLF buyback program lets you
Wipe Out Your Student Loans Faster by Doing These 5 Things Now — but Don’t Do This
