When I look back on the early days of what I have been calling the “COVID times,” one of my key memories is the day student loan payments were paused. On one hand, I was relieved to not have to make payments on my student loans. On the other hand, I was also worried about how serious the whole Coronavirus thing was if it was enough to get the government to say they don’t want my money! By the time the first forbearance extensions was granted in August 2020, it was clear that COVID-19 was serious business and was going to be around for a while.
If you, like me, have student loans, you may have been paying close attention during the past 3 years to the news about possible student loan forgiveness and the countdown to when student loan payments restart. Or, like a lot of people I know, you may have spent the past 3+ years pretending that your student loans don’t exist and wishing they would just disappear before the payments restart.
Unfortunately, turning a blind eye to student loans won’t work for much longer as payments on federal student loans will be due starting in October. (Interest will begin to accrue on September 1, 2023.)
Fortunately, the new SAVE Repayment Plan may allow you to make lower monthly loan payments. The SAVE Plan is an income-driven repayment plan that calculates monthly payments based on income and family size. Aside from lower monthly payments, one of the key features of the SAVE Plan is that It if the borrower makes their monthly payment, their loan balance won’t grow due to unpaid interest.
The SAVE Plan may not be the best plan for everyone, so it is important to review the small print and talk to a loan counselor or financial advisor.
Regardless of what type of repayment plan you are on or may be considering, one of the best ways to start preparing for payments to restart is to check out the Loan Simulator offered by StudentAid.gov.