Student loan repayments begin in October
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ROCHESTER, N.Y. – October has arrived which means college student loan repayments are resuming for the first time in three years. Whether you’ve thought about it or not, your first statement should be arriving in the mail soon.
It’s supposed to arrive at least 21 days before the due-date.
It’s a topic we can’t cover enough; it’s been so long since these payments were first put on pause. For many of us, it’s human nature to put it off, and procrastinate. But experts say, that’s the last thing you should be doing.
Carolina Sullivan is a first year masters student, studying opera performance at Eastman School of Music. She went to another university for her bachelor’s degree.
“We don’t have to pay them [loans] back yet, as we’re students,” she said.
But with recent news about student loan payments kicking in again, and interest starting to accrue, she decided to check her federal student aid account.
“Looking at what my balance is, and how soon after I graduate I’m going to have to start making payments, it is really frightening,” she said. “Especially because I can’t work full time; I’m a full-time student.”
Carolina said she is working three jobs as part of a graduate assistantship, but said it barely pays the bills, and not a lot is going towards savings.
“Everything is so expensive now.”
Bankrate analyst Sarah Foster said there are changes borrowers should be aware of, though. Including the SAVE plan, which she said could significantly lower your monthly payment.
“So the way that other income driven repayment plans have worked in the past, is that those payments are calculated on 150% percent of income above the poverty line,” said Foster. “Now it’s calculated on 225% percent.”
It’s a wider margin; meaning more of your income is protected. Foster said the Department of Education is considering you need more income to live and afford basic necessities.
She said now is the time to log into your account and figure out a plan that works best for you.
“They can find the payment plan that allows them to pay off debt agressively, so they can get rid of it even quicker. Or they can find a payment plan that works better for their budget, so they can contribute towards other goals, like saving towards emergencies.”
Carolina said she is looking at a few options for saving, like having a dual-income. She’s interested in getting married soon, which will help financially.
Borrowers can get help to get started here.