The Resuming Of Federal Student Loan Payments And Other Things Borrowers Need To Know

What borrowers need to know as federal student loan payments resume soon.

Federal student loan payments
What will happen after the resume of the federal loan payments? (Photo: Fox Business)

The Resume Of Federal Student Loan Payments

Federal student loan payments are set to resume after a 42-month pause, and borrowers in Florida need to prepare for the changes. The Biden administration has introduced the Saving on A Valuable Education (SAVE) Plan, an income-driven repayment plan that replaces the previous plan just in time for the resuming of federal student loan payments.

The SAVE Plan offers the lowest monthly payments for most borrowers and increases the income cutoff under which no payments are due which could be beneficial after the resuming of federal student loan payments. Borrowers may need to recertify their income annually to stay on the plan and be part of the resuming of the federal student loan payments.

Missed federal student loan payments will not be reported to credit agencies or sent to collections during the first 12 months of repayment. However, defaulting on federal student loan payments can have serious consequences for credit scores and eligibility for federal programs.

The Supreme Court blocked the Biden administration’s plan to cancel $400 billion in federal student debt, so borrowers who have federal student loan payments should consider minimizing their total balance. The Biden administration is also canceling approximately $39 billion in student debt for about 800,000 borrowers which will result in no federal student loan payments.

According to a published article by the Tampa Bay Times, borrowers with federal student loan payments should consult with tax experts to understand the tax implications of loan forgiveness. Finally, borrowers who continue to pay federal student loan payments should be cautious of scams and avoid companies that promise to help reduce loans for a fee.

Borrowers Still Need To Pay Loans On Time

In a published article by Money, many borrowers are feeling frustrated and betrayed, especially after President Biden’s student loan forgiveness plan was rejected by the Supreme Court. Some people on social media platforms like Reddit and Twitter have been suggesting the idea of not paying their student loan bills to spark a national debt strike.

However, experts warn that refusing to pay could have devastating financial consequences. Experts advise that not paying student loans can be more expensive in the long run and may lead to greater financial hardship.

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