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Important Information: Federal Student Loan Payments Resume

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What to Know as Federal Student Loan Payments Resume

After a three-year pause due to the pandemic, federal student loan borrowers will need to resume making payments. It is important to be aware of the following information:

Starting Point: Checking Your Loan Servicer

Log in to your StudentAid.gov account to determine your loan servicer. Many loan servicers changed during the pandemic, so it's crucial to verify who your current servicer is. Access your account with them to view your student loan balance, monthly payment amount, and interest rate. Take note of the type of student loan you have to understand which income-driven repayment plans you may qualify for. Ensure your personal information is up to date in your account to receive important correspondence.

Knowing Your Payment Amount

Your loan servicer's account will provide information on your monthly student loan payment. If you are unsure of your servicer, you can find it by logging into your studentaid.gov account.
Options for High Payments
If you anticipate difficulty making payments, explore available options. President Joe Biden announced a 12-month grace period to assist struggling borrowers. During this period, making payments is encouraged but not mandatory, and it won't impact your credit score or result in default. Research if you qualify for an income-driven repayment plan, which sets your payment amount based on your income and family size. Utilize online loan simulators to compare available plans and determine the best fit for your needs.
Additional Programs for Student Loan Debt
Government and nonprofit employees may be eligible for the Public Service Loan Forgiveness program after 10 years of regular payments. Some income-driven repayment plans cancel the remaining debt after 20 to 25 years. Borrowers defrauded by for-profit colleges may apply for borrower defense and receive relief. To enroll in an income-driven plan, complete an application through the Federal Student Aid website.
Reducing Costs and Automatic Payments
Enrolling in automatic payments through your loan servicer's account can lower your interest rate by a quarter of a percent.
Beware of Scams
Stay vigilant to avoid scams. Never pay for assistance or application to loan programs. The Department of Education will not call you, so be cautious of unsolicited phone calls promising debt cancellation. Protect yourself by knowing official email addresses, checking for typos in advertisements, and never sharing your login information. By staying informed and exploring available options, borrowers can navigate the resumption of federal student loan payments with greater confidence.

Impact of Resuming Federal Student Loan Payments on New Businesses

The resumption of federal student loan payments after a three-year pause due to the pandemic could have significant implications for new businesses, particularly those targeting young professionals and recent graduates. As borrowers navigate the complexities of repayment, including understanding their loan servicer, payment amount, and potential options for high payments, their financial priorities may shift.

Changing Consumer Spending Habits

The financial burden of resuming loan payments could lead to a decrease in discretionary spending, impacting businesses in sectors like entertainment, dining, and non-essential retail. New businesses in these sectors may need to adjust their marketing strategies and pricing models to attract cost-conscious customers.

Opportunities for Financial Services

On the other hand, this could present opportunities for businesses in the financial services sector. The need for advice on managing loan repayments, exploring income-driven repayment plans, and avoiding scams could drive demand for financial advisors and fintech solutions.
Impact on Job Market and Business Growth
The loan repayment resumption could also impact the job market. Borrowers may be more likely to prioritize stable, high-paying jobs to manage their loan payments, affecting startups and small businesses that rely on young talent but may not be able to offer competitive salaries. In conclusion, while the resumption of federal student loan payments presents challenges, it also offers opportunities for new businesses to innovate and adapt.
Story First Published at: https://financialpost.com/pmn/business-pmn/federal-student-loan-payments-are-starting-again-heres-what-you-need-to-know
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