Be Prepared Before the Student Loan Payment Pause Ends

Under the most recent "CARES Act" extension, required student loan payments have been suspended. The payment moratorium is set to expire on August 31, 2022. Here is how Edapt Student Services team suggests that all borrowers prepare before the student loan payment pause ends.

Keep an eye on your NSLDS for any problems or inconsistencies.

Make sure you're in the finest repayment situation possible.

Check to see whether you're eligible for any more help.

Keep track of everything.

Don't expect your loans to "disappear" on their own.

OWN IT, THIS IS YOUR PROGRAM.

Don't put your faith in your Servicer blindly.

Keep yourself up to date

Keep track of all of the available discharge programs.

Get to Know Your Loans

Remember to review your IDR program.

Keep an eye on your NSLDS for any problems or inconsistencies. We believe that monitoring your NSLDS for errors or discrepancies should be your top concern during this period. Servicers are departing the sector and moving your records to other servicers, which leaves a lot of possibility for errors. If you leave these errors uncorrected, you may be denied when you request for loan discharge in the future.

Make sure you're in the finest repayment situation possible. Before the payment freeze ends, make sure you're in the greatest repayment situation possible– Since many participants recertified their program in 2019, your payment may be based on your 2019 income and household size when payments resume. If your household size or income has changed in the last three years, you may be eligible for a reduced payment now.

Check to see whether you're eligible for any more help. Due to recent program upgrades and changes, many new benefits are now available, including the PSLF Limited Waiver, Operation Fresh Start Program, and IDR back payments adjustments. Also, if you believe you have been the victim of forbearance steering, you should seek help right away.

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Keep track of everything. Recent statistics show that 98 percent of debtors who file for a discharge are denied. This, we assume, is partially due to borrowers failing to preserve enough records in order to dispute inaccuracies during their 10- to 25-year tenure.

Don't expect your loans to "disappear" on their own. There has been a lot of talk about eliminating student debt, but until that happens, you should maintain your loans current and in good standing.

OWN IT, THIS IS YOUR PROGRAM. This includes staying current on all new regulations, program requirements, and recent changes over the course of your 10-to-25-year tenure. Not to mention a clear grasp on how these programs operate and how to remain compliant. Don't just rely on your servicer to take care of things in your best interest. These are your loans, and if something goes wrong with your file, whether it's your fault or not, you'll be held accountable. You can contact the Education Department's Ombudsman Group if your issue with your servicer is not resolved to your satisfaction.

Don't put your faith in your Servicer blindly - According to a 2021 inquiry just obtained by NPR, only 32 of the 4.4 million borrowers who had been paying for at least 20 years had their loans annulled under IDR up through 2021. Some servicers previously had no idea when borrowers qualified for forgiveness due to a lack of tracking, mismanagement of IDR programs has proven particularly harmful to low-income borrowers, and large amounts of information continue to be lost when borrowers are transferred between servicers, according to the three main points brought to light.

Keep yourself up to date. At the same time as encouraging borrowers to rely on servicers, the Department of Education is taking steps to rectify past servicer malfeasance, which has resulted in countless complaints, lawsuits, and CFPB investigations. Check all of the information you receive from your servicer numerous times to ensure that it is correct.

Keep track of all of the available discharge programs. There are numerous distinctions among forgiveness programs, based on your circumstances, occupation, loan kinds, and a variety of other elements about which you should be aware. Forgery discharge, false certification discharge, unpaid refund discharge, TEPSLF, discharge due to death, closed school discharge, and bankruptcy discharge are all examples of forgiveness.

Get to Know Your Loans- Depending on the sorts of loans you possess, you may be eligible for forgiveness:

The income-driven plan known as Income-Contingent Repayment (ICR) is one method to obtain forgiveness for parent plus loans. Your monthly payments are limited to either 20% of your discretionary income or the amount you would pay on a fixed 12-year plan, whichever is less. It also reduces your monthly payments by extending your payback period to 25 years. The remainder of your debt will be discharged, if you still owe money after 25 years of payments. When the student loan forgiveness provisions expire in 2026 or later, your outstanding balance will be forgiven, but it will be considered taxable income. So, before you say goodbye to your Parent PLUS loans, make sure to save aside money for that one last expense.

Although the Federal Perkins student loan program is no longer accepting new applications, if you have old Perkins loans from your college days, you may be eligible for Perkins student loan cancellation and discharge. This option is available to borrowers who work in the public sector. If you have Perkins loans and believe you may be eligible for forgiveness, you should learn more about the PSLF program as soon as possible.

Remember to evaluate your IDR program - In an income-driven repayment plan, your monthly student loan payment is set at an amount that is expected to be feasible depending on your salary and family size. There are four options for income-based repayment:

Income Based Repayment Plan (IBR Plan)

The main difference between these two plans is that IBR loan payments are limited to 10% of discretionary income, whereas PAYE payments are limited to 10% of adjusted gross income minus 150 percent.

Revised Pay As You Earn Repayment Plan (REPAYE Plan)

REPAYE is for Revised Pay As You Earn and is a federal income-driven repayment scheme for federal student loans. Borrowers pay a percentage of their "discretionary income" for 20 to 25 years under the REPAYE student loan repayment program, after which remaining REPAYE loans debt is cancelled.

Repayment Plan on a Pay-As-You-Earn Basis (PAYE Plan)

Your choice of PAYE or REPAYE is based on your financial situation, chosen repayment plan, and whether or not you are married. PAYE loan repayment schemes are normally desirable for married borrowers, but REPAYE loan repayment programs are usually preferable for single borrowers.

Income-Contingent Repayment Plan (ICR Plan) (ICR Plan)

Monthly payments on the Income-Contingent Repayment (ICR) Plan are the lesser of (1) what you would pay on a 12-year repayment plan with a fixed monthly payment changed based on your income or (2) 20% of your discretionary income divided by 12.

Contact Edapt USA Student Services today!

Review your account and verify that you are still enrolled in the best plan for your current scenario!