TAMPA, Fla. — For the first time in three years, student loans have started accruing interest again.
“For the last three years, there’s been a reprieve in payments. So it’s been a great opportunity to put some money away, but now is the time to be prepared to repay your student loan debt,” said Leslie Tayne, financial attorney and credit and debt expert.
Payments begin in October.
Borrowers should start receiving their first bill soon.
There will be a grace period of sorts once payments begin again.
The Biden Administration said it will provide a 12-month on-ramp period where borrowers will not be reported to credit bureaus or be referred to collection agencies for late, missed, or partial payments.
In the meantime, experts suggest reaching out to your loan servicer now.
“Make sure all the information is updated so that they have the appropriate email addresses and home mailing addresses and that you can log in to your account online without any challenges. You want to understand who’s servicing your programs and your loans, and you understand exactly when your payments are going to start and what the approximate payments are going to be,” said Tayne.
Debt experts stress the importance of understanding your budget.
“If you don’t understand your budget, you’re going to be definitely challenged in understanding what programs you can apply for, what you qualify for, and how much is available in your budget to repay your debts,” said Tayne.
“If you’re already tight on your budget, now is the time to look to figure out ways to save money. Cut back on subscriptions, streaming services, look for other ways to increase your income, supplement income, because you will start receiving notices about repayment. So, in terms of programs, many of the programs have changed or have actually expanded. You might actually qualify for some of the programs, but you won’t know that if you don’t understand what your budget is and you don’t have a good grip on what your income is,” she added.
