Student loan repayments are expected to resume in October. Here’s how to get help if you need it | Lifestyles

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FILE – In this May 7, 2021 file photo, University of Texas Rio Grande Valley graduates sit socially distanced at early morning sunrise during their graduation ceremony in the parking lot of the school in Edinburg, Texas. Repayment will resume Oct. 1 for 42.9 million federal student loan borrowers. Vulnerable borrowers may not be ready to make payments, but there are options for finding legitimate student loan help and avoiding default as a result of missing payments. 


Delcia Lopez

 

KNOW YOUR REFUND OPTIONS

“Your options aren’t ‘pay or default’,” says Megan Coval, vice president of policy and federal relations at the National Association of Student Financial Aid Administrators. “There are options in between to reduce payments. No one, including the federal government, wants you to default. ”

The default occurs after about nine months of late payment of the federal loan. This can lead to a damaged credit score, wage garnishment, withholding tax refunds, and other finance charges.

– If the payments will be a test: Enrollment in an income-based repayment plan sets payments to a portion of your income, which could be $ 0 if you are out of work or underemployed. Or you can choose to suspend payments (with collection of interest) using deferral or withholding from unemployment.

– If you were a delinquent before the break: Your loans will be reset to “in good standing”. Making monthly payments on time will help you maintain this status. But if you think you might miss a payment or don’t think you can afford the payments, contact your service agent to sign up for an income-driven plan.

– If you were at fault before the break: Contact your loan holder or the education defaults group for instructions on how to repair your loan and get back in good standing.

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