WINOOSKI, Vermont (WFFFThe Biden administration has extended a moratorium on federal student loan payments until January, allowing borrowers to prepare, according to the Education Department.
But how should they?
Scott Giles, president of the Vermont Student Assistance Corporation (VSAC), said borrowers will want to fully understand their debt situation, as well as the tools that can help keep payments low. He said payment programs are available for some borrowers, which will allow them to continue the break. “A borrower who is really struggling or is concerned about this should contact their service agent or the VSAC for advice and guidance on how they can access this program. “
On the flip side, if you’ve been doing well for yourself but have always benefited from not having to make payments, Giles said there’s good reason to get back into the habit before the end of the season. moratorium.
“For borrowers who continue to be able to work, they can use the next five months, if they choose, to make payments,” Giles said. “This is a time when there is no interest, so it almost counts as a forgiveness of loan for them.”
Giles said that the fact that we know a firm end date for the moratorium is helpful because even though people haven’t had to pay their loans in over a year, communication from the education department doesn’t was not entirely clear.
“We were very concerned that if they had simply reactivated billing for these student loans on September 30 without any preparation time, a number of borrowers would end up going delinquent simply because they did not know that they were supposed to do it. make payments. “
It is estimated that Americans owe a total of $ 1.7 trillion in student loans. Some lawmakers, including Senator Chuck Schumer, wanted the Biden administration to go further and tackle the broader student debt crisis.