As a result of legislation enacted by Congress, the student loan payment freeze is ending. Student loan interest will resume Sept 1, 2023. For most, payments will be due in October 2023. It is expected that nearly half of borrowers are unable to begin making payments again. Many people are simply not in a stable enough position to begin with these payments at this time. One in five borrowers are facing monthly payments over $500! Another survey stated one out of four will have to consider putting off buying a house or getting married in order to begin payment on their student loans again.
If you are entering repayment or beginning your student loan payments for the first time, there are 3 things you should do now.
- Make a budget – take a hard look at your monthly income and expenses.
- You will need to know this information in order to review any options that Federal Student Aid or Loan Servicers have to offer.
- Identify who your Loan Servicer is and make sure they have your contact information.
- During this period of forbearance, several Federal Student Loan Servicers consolidated with other companies. You need to make sure they know your contact information so that they can keep you up to date on deadlines, offers, and other critical information as things progress. If you do not know who your Student Loan Servicer is, you can check by logging into the Federal Student Aid website.
- Explore Income-Driven Repayment plans and any other options that you qualify for that are being offered through the Federal Student Aid organization.
- If after doing all this, you are still facing a payment that you cannot afford, call and speak to a bankruptcy attorney about the options available under a Chapter 13 Plan.
If you are facing payments you cannot afford, even after reviewing the options offered to you by the Federal Student Aid office of the US Department of Education, a Chapter 13 Plan option may be for you. A Chapter 13 bankruptcy allows you to either put off repayment completely for up to 5 yrs or it allows you to set the amount of monthly repayment during your 5 yr plan. Not only are you back in control of your student loan debt, but at the same time, you can deal with all aspects of your other debt. High credit card debt? Consolidate it or wipe it out altogether. High car note? Lower the monthly note and/or possibly write off a large amount of the interest. A Chapter 13 bankruptcy plan is a very powerful financial tool to have – you should at least be sure to understand what it can do for you so that if you ever have need of it, you can use it to your greatest advantage. We haven’t even scratched the surface of what it can do for you in this short post. Call me – let’s talk about your situation and see if a Chapter 13 Plan would help you!