For 42.9 million student loan borrowers, it\u2019s been 18 months without a payment. That ends in October \u2014 ready or not.<\/p>\n\n\n\n
The interest-free federal student loan payment pause, known as a forbearance, was extended three times after it initially went into effect in March 2020 as a way to help reduce the financial blow many borrowers experienced as a result of the pandemic.<\/p>\n\n\n\n
But with payments set to resume in a few months, servicers \u2014 the companies that manage student loan payments \u2014 are already fielding thousands of calls a day from borrowers seeking student loan help<\/a>, according to Scott Buchanan, executive director of the Student Loan Servicing Alliance, a nonprofit trade organization for student loan servicers.<\/p>\n\n\n\n Time is running out for both servicers and loan borrowers to prepare for repayment.<\/p>\n\n\n\n While Education Secretary Miguel Cardona has indicated it\u2019s not \u201cout of the question\u201d to extend the loan forbearance beyond Sept. 30, for now borrowers should be prepared for bills to come due sometime in October (they\u2019re supposed to be notified at least 21 days prior to their exact billing date).<\/p>\n\n\n\n Servicers are expecting borrower demand for help to increase and may have trouble keeping up. The repayment system has never been turned off before, so no one is sure what restarting it simultaneously for 42.9 million people will look like.<\/p>\n\n\n\n \u201cWe don\u2019t have any guidance from the department [of Education] about what a resumption strategy would look like,\u201d says Buchanan. \u201cWe are in the time frame where those plans need to be communicated; it cannot wait.\u201d<\/p>\n\n\n\n Richard Cordray, the newly appointed head of the Education Department\u2019s federal student aid office, told The Washington Post for a story on June 11 that restarting payments was \u201ca very complex situation\u201d and said the office planned to provide more information to servicers soon. He also said the department planned to hold the servicers accountable by setting rigorous performance benchmarks.<\/p>\n\n\n\n Despite the uncertainty, if you\u2019re worried about your ability to make payments, there\u2019s no downside to contacting your servicer now to beat the rush, says Buchanan. Ask about your best options to manage payments, depending on your situation.<\/p>\n\n\n\n If you\u2019re not sure who your servicer is, log in to your My Federal Student Aid <\/a>account to find out. To ensure you don\u2019t miss any notifications, check that your contact information is up to date on your loan servicer\u2019s website and in your StudentAid.gov profile.<\/p>\n\n\n\n \u201cYour options are not \u2018pay or default,\u2019\u201d says Megan Coval, vice president of policy and federal relations at the National Association of Student Financial Aid Administrators. \u201cThere are options in between for lowering payments. Nobody, including the federal government, wants to see you go into default.\u201d<\/p>\n\n\n\n Default happens after roughly nine months of late federal loan payments. It can result in a damaged credit score, wage garnishment, withheld tax refunds and other financial burdens.<\/p>\n\n\n\n Servicers may be your first point of contact, but they don\u2019t have to be your last. You may have other needs your servicer isn\u2019t providing, such as financial difficulty beyond your student loans or legal advice.<\/p>\n\n\n\n Cash-strapped borrowers can find legitimate student loan help for free with organizations such as The Institute of Student Loan Advisors. Other student loan help, such as a credit counselor or a lawyer, will charge fees. You can find reputable credit counselors through organizations such as the National Foundation for Credit Counseling.<\/p>\n\n\n\n Financial planners can also help, but it\u2019s best to look for one with student loan expertise, such as a certified student loan professional.<\/p>\n\n\n\n You can find legal assistance, including advice on debt settlement and pursuing bankruptcy, with lawyers who specialize in student loans or with legal services in your state as listed by the National Consumer Law Center<\/a>.<\/p>\n\n\n\n If your issue is with your servicer, contact the Federal Student Loan Ombudsman Group, which resolves federal student aid disputes. You can also file a complaint<\/a> with the Federal Student Aid Feedback Center or the Consumer Financial Protection Bureau.<\/p>\n\n\n\n Legitimate student loan help organizations won\u2019t seek you out with offers of debt resolution through unsolicited texts, emails or phone calls. Most importantly, you don\u2019t have to pay anyone to apply to consolidate your debt, enter into an income-driven repayment plan or apply for Public Service Loan Forgiveness.<\/p>\n\n\n\n \u201cThe hard and fast rule is that applying for [consolidation and repayment] programs is free,\u201d says Kyra Taylor, staff attorney focusing on student loans at the National Consumer Law Center. \u201cI think when people realize what they can do for free, it makes it easier for them to spot scams.\u201d<\/p>\n\n\n\n And don\u2019t fall for any company that promises to forgive your student loans or wait for the government to do so \u2014 thus far, no executive action from President Joe Biden or legislation from Congress has come to pass.<\/p>\n\n\n\n More From NerdWallet<\/strong><\/p>\n\n\n\n Anna Helhoski writes for NerdWallet. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.<\/p>\n\n\n\n The article With Student Loan Payments Set to Return, Here\u2019s How to Get Help originally appeared on NerdWallet.<\/p>\n","protected":false},"excerpt":{"rendered":"For 42.9 million student loan borrowers, it\u2019s been 18 months without a payment. That ends in October \u2014 ready or not. The interest-free federal student loan payment pause, known as a forbearance, was extended three times after it initially went into effect in March 2020 as a way to help reduce the financial blow many […]","protected":false},"author":7,"featured_media":2039,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"","attr_excerpt":["For 42.9 million student loan borrowers, it\u2019s been 18 months without a payment. That ends in October \u2014 ready or not."],"footnotes":""},"categories":[6],"tags":[31],"class_list":["post-1897","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-quick-tips","tag-student"],"yoast_head":"\nTalk with your servicer now<\/strong><\/h3>\n\n\n\n
Know your repayment options<\/strong><\/h3>\n\n\n\n
Find a legit resource<\/strong><\/h3>\n\n\n\n
Avoid scammers<\/strong><\/h3>\n\n\n\n