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Mississippians Prepares to Start Paying Back Student Loans

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Friday, August 11, 2023   

Mississippians are working on their monthly budgets as the pause for federal student-loan payments comes to an end, and the pressure of another monthly expense begins.

The repayment process starts in October for more than 400,000 borrowers in the Magnolia State and 40 million throughout the country.

Brian Walsh, certified financial planner and manager of financial planning for SoFi, said interest will resume starting Sept. 1 and borrowers should start planning how to repay their loans.

"Everyone who had their student loans paused for the last three and a half years needs to start planning for that they're going to be making these payments," he said, "because there is going to be some flexibility related to an on-ramp for a year related to reporting to credit bureau and collections."

According to the Education Data Initiative, the average borrower in Mississippi holds more than $36,000 in student-loan debt. Repayments begin Oct. 1.

Walsh said there are several options available for Mississippians who can't afford their payments or want to reduce them, but highlighted the federal SAVE plan, which offers borrowers income-based repayment options if they qualify.

"With income-driven repayment, essentially, your payments are kept to a certain percentage of your income," he said, "and with this new program, more of your income is going to be excluded. Eventually, the percentage of your income for payments for undergraduate loans will be cut in half. And at the end of the day, it's going to be the most generous option available for income-driven repayment plans."

Walsh said other options include a hardship forbearance, extending terms up to 20 years, graduated repayment plans, or consolidation, refinancing loans and lowering monthly payments.

Support for this reporting was provided by Lumina Foundation


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