ROANOKE, Va. – For the first time in three years, borrowers are required to make a payment on their student loan.
10 News has covered the student loan chaos including the potential for loan forgiveness and the payment pause.
Scott Kemp is a student loan advocate with the State Council of Higher Education for Virginia. He said ever since it became apparent that the payment pause was ending, he’s received numerous phone calls with concerns from borrowers.
“Either their life situation is still not good and they’re having difficulty figuring out how they’re going to make this loan payment … or they have been out of the habit, out of the practice of making those monthly loan payments,” Kemp said.
Student loans have become more common over the years with the price of college tuition going up. Students have also turned to alternative routes like workforce development or Career and Technical Education.
“What is the long-term impact of the amount of debt I have to take out to go down the path that I want and realize well maybe I need to consider a more affordable path so that I don’t end up in a situation where I can’t afford to pay my loans,” Kemp said.
There are multiple ways the government is trying to help people with lower incomes or certain financial situations pay off their student loans. After the Supreme Court blocked Biden’s forgiveness plan, the Department of Education released the SAVE Plan.
Under the SAVE Plan, a higher percentage of people’s discretionary income – the money left over after basic necessities such as rent and food – will be shielded from loan payments, resulting in lower monthly bills.
As is the case with other income-driven plans, once a borrower makes good on those payments for a set amount of time, usually between 20 and 25 years, the remaining loan is forgiven.
If you’ve worked for a government agency or a nonprofit, the Public Service Loan Forgiveness program offers cancellation after 10 years of regular payments.
Kemp and other student loan experts want to warn people against scams as they expect more people to hear from scammers trying to convince people of ‘more relief’ or ‘paying faster.’
Some of the tips Studentaid.gov gives for watching out for scams include:
- They require you to pay up-front or monthly fees for help.
- They promise immediate and total loan forgiveness or cancellation.
- They ask for your username and password.
- They ask you to sign and submit a third-party authorization form or a power of attorney.
- They claim that their offer is limited and encourage you to act immediately.
- Their communications contain spelling and grammatical errors.
Studentaid.gov has a list of other tips for people wanting to pay off their student loans.