GA Borrowers Get Ready to Resume Federal Student Loan Payments
Friday, August 11, 2023
With summer coming to an end, kids are headed back to school, but for college graduates, it also means resuming payments on their federal student loans after a hiatus of more than three years.
In Georgia, nearly 50% of borrowers are under age 35. Starting Sept. 1, interest will begin accruing on those loans, and payments will be due in October.
Brian Walsh, senior manager of financial planning for the online personal finance company SoFi, said there are steps they can take before then, to get prepared.
"Number one, it's important to take a step back and understand what federal student loans you have," Walsh advised. "You could do that by going to studentaid.gov and find information on your federal student loans, what types there are, the balances, interest rates."
Walsh emphasized it is also important for people to understand the terms of their loans, how to repay them, and what loan forgiveness options are available. Nearly 1.7 million people in Georgia hold student debt, the seventh-highest number of borrowers in the country.
The Consumer Financial Protection Bureau warned 30 million borrowers will have a new loan servicer when payments resume, and scams are more prevalent. Walsh warned borrowers to verify the legitimacy of any student loan communication.
"One of the first places to start is by if you have a federal student loan, connect with your servicer," Walsh urged. "Because over the last three-and-a-half years, not only have payments and interest on federal student loans been paused, but there's been a ton of turnover as far as loan servicers."
Walsh explained once verified, a loan servicer can discuss repayment options to help borrowers avoid financial hardship. He highlighted the new income-driven repayment option introduced by the Biden administration, and added the plan is generous compared to previous ones, and may benefit a majority of student borrowers.
Support for this reporting was provided by Lumina Foundation.
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