Give your students a heads up to start preparing for student loan payments resuming 60 days from June 30

[LuvOrlando]

I hope more effort is made into getting the word out that students and their families may possibly be expected to start making payments towards their student loans starting 60 days after June 30.
I got this info from an article written by Addy Bink 5/14/23 in The Hill, Student loan forgiveness: What to know as the Supreme Court mulls case.

"When do I need to start making payments again? And could the pause be extended?​

Some borrowers who graduated during the COVID pandemic have never been required to make a regular payment on their student loans. That’ll change soon, but the exact date will depend on when the Supreme Court makes its ruling.


The Biden administration previously explained that payments would resume 60 days after the Supreme Court makes its decision or 60 days after June 30, whichever happens first."


This is the plan we used to prepare so I'm sharing in case there are people who read this not sure where to start:

If your family or student is looking to refinance then it is important to find out what the different lending institutions want to see so a person can qualify. This program still works to get an idea of what is in your name. https://www.annualcreditreport.com/index.action

From what I gathered when I looked for my kids, it seems that student loans are treated a bit differently from other loans and the student needs to qualify on their own with no cosigner to refinance. Call around to check on this but it was true when I looked last, at least to the big institutions where I was calling. As a result, I first coached my new graduates to get their own checking accounts that they set up with a saving account attached holding $100 to protect from overdrafts, fees and mistakes as they are learning to manage their finances. The linked savings account is a backup & works well to protect the checking account. They actually have 2 savings where one is linked to checking but have another second savings that is walled off and unable to be accessed by the card in case the card is lost or stolen, this acts as the true savings account.

Next up was getting a credit card in their own names and keeping it very clean, it is used and then paid, important to have a good history of good payments. The idea of paying money in interest to not spend out of cash on hand was a pretty quick lesson this way. Not a shock that they prefer not paying fees, I wish someone taught me this stuff back when.
In the end, my young adults ended up with accounts at the family bank, USAA, and Discover cards because they qualified as students & the cards provide a free credit score plus an inexpensive monitoring option. This financial institution also has a student loan program so it seems a fluid option although we will be weighing all options moving ahead to see what the other banks offer. I know there are a lot of options out there and choices so I guess it's time to start planning if things go live again, who knows what will happen but better safe than sorry.

I hope lots of articles are written on this stuff will show up but I don't see too much yet. Not sure if requirements are easing or toughening from the last time I checked, time will tell, but hopefully banks who want the business in interest income will create good offerings. No matter what it is best to be prepared.

 

[Southernmiss]

Our son has had the end of August in mind for some time. Though, he's been hopeful to have some of his loans forgiven. But I don't think that's going to happen.

He graduated last year and started his real job in June. He's used this time to maximize savings and get some interest $ in his pocket for the money that he would have paid on student loans. He's really impressed us with his diligence in looking for the best rates through online banks.

It's been really helpful for him to have a pause on the interest as he adjusted to the "real world" after college graduation.

 

[aprilgail]

Mine has continued to pay hers the whole time they were suspended- she figured she was working and making money so she might as well pay them down.

 

[cvjw]

Doubt the payments starting again will get as much press as the loan forgiveness got.

 

[Cogswel_Cogs]

Mine has continued to pay hers the whole time they were suspended- she figured she was working and making money so she might as well pay them down.

We did same with daughters. Figured we saved a lot of interest.

 

[jo-jo]

Mine has continued to pay hers the whole time they were suspended- she figured she was working and making money so she might as well pay them down.

I wonder people will wait in til last min to take advantage of the zero interest. but still hope something will change.

im assuming one can make a big payment just before the restart.

 

[Cogswel_Cogs]

I feel bad for people who just thought it was going away. It was very irresponsible to put forth such a result with people who might have put themselves in a very bad situation now.

 

[LuvOrlando]

I wonder people will wait in til last min to take advantage of the zero interest. but still hope something will change.

im assuming one can make a big payment just before the restart.

I think most loans have a sort of actionable range, or at least mine always did, of normally around 30 days. Meaning you apply and get the OK from the lender and a sheet that reads something like, "Interest rates are --% until A/BB/2023," but the loan isn't really activated until it is used to pay for something so while you could incur fees lost and all, you really could just not take possession of the money & walk away. This has been what I am thinking of doing around 30 days out, unless there is something different now.

If a person has been saving up it also possible to simply make lump sum payments to all your loans that first month which will pay down the debt and grant you an additional month to sort out financing options. So while you do incur interest for that month, still, it might be a benefit to prevent a person from making a bad decision in haste.

 

[LuvOrlando]

Another thought, I really hope our leaders are going to get on ALL the lenders and require them to publish a ton of HOW TO advertisements and blurbs out on Social Media etc so people can sort things out.

Some of these former students have been out of school a while and moved a few times due to all the recent turmoil including recent job losses in various industries. Lenders need to be forced to publicize for borrowers how to find the lenders and loan details immediately so we can prevent massive defaults due to lack of communication.

I suspect the loans that exist might show up here, but really who knows https://www.annualcreditreport.com/index.action even if the loan amounts do show up the other details like who holds them and how to pay etc are not going to be there unless someone pushes the issue to protect our kids.

Frankly, I am as concerned about miscommunication with the people who can pay as I am about those who simply can't pay. I'll keep looking for details.

 

[OKbyme]

I feel bad for people who just thought it was going away. It was very irresponsible to put forth such a result with people who might have put themselves in a very bad situation now.

Irresponsible is an understatement. Two of my three are employed and they stopped paying them because they didn't have to and there were car payments, health insurance, etc. Told them to pay down to the $10K balance at least.

Oldest doesn't have as good an income as her sibs, and needed to buy a car. She worries me the most.

Worst is probably all those kids who never had to make a payment in all this time. Wonder if there are going to be a lot of defaults once the payments restart.

 

[tvguy]

Another thought, I really hope our leaders are going to get on ALL the lenders and require them to publish a ton of HOW TO advertisements and blurbs out on Social Media etc so people can sort things out.

I agree the information needs to get out. I only disagree in that the LEADERS who promised loan forgiveness and couldn't deliver need to be the ones getting the message out. The lenders aren't at fault.

 

[JaxDad]

I agree the information needs to get out. I only disagree in that the LEADERS who promised loan forgiveness and couldn't deliver need to be the ones getting the message out. The lenders aren't at fault.

Those leaders already got what they wanted.

 

[Pea-n-Me]

Mine has continued to pay hers the whole time they were suspended- she figured she was working and making money so she might as well pay them down.

Both of mine did too. I didn’t forsee it ever happening.

 

[Traveling on cc points]

I wonder people will wait in til last min to take advantage of the zero interest. but still hope something will change.

im assuming one can make a big payment just before the restart.

This is exactly what I would have done if my daughter had loans. I would have put the monthly payments aside in a “high interest” savings account until right before the interest started again.
I guess I shouldn’t be but I am a little floored at the amount of people who just stopped paying or saving the payments because they might not have to pay.

 

[mjkacmom]

My daughter owes $20,000, has $30,000 put aside in her checking account, looks like she’ll be writing a $20,000 check. My son, I have no idea, but he’s been paying the private loans first since the freeze.

 

[Kestryl]

I might get attacked for this, but we’re incredibly grateful for the pause, as it allowed my husband to put his payments towards his still-accruing interest private loans.

 

[LuvOrlando]

I might get attacked for this, but we’re incredibly grateful for the pause, as it allowed my husband to put his payments towards his still-accruing interest private loans.

Noone should attack you. All the money sitting in small and medium savings accounts from regular everyday people is what stopped the banking crisis we've seen over the past few months from growing exponentially. The fact that regular people kept their money still which allowed it to be pooled into massive buffers for the banks is what saved the banks as businesses and large depositors got twitchy and pulled their money. This is because regular people don't have more than 250K sitting in a single account in their local banks, a happy & lucky accident. Noone should be annoyed at those who saved & noone should be annoyed at the circumstances that permitted the savings that saved the banking industry from the consequences of their decisions. A very lucky and happy accident indeed.

 

[Frwinkley]

My daughter owes a lot. She is a dentist who graduated in May 2019 and had a 6 month grace period before payments begin. She made 3 payments before the pause in March 2020. However, she and her husband have "paid themselves" the same amount as if they were paying her loans (thousands of dollars each month). They have made a substantial amount of money in interest. As soon as payments begin again, they will be making a hefty lump sum payment.

 

[barkley]

if they plan to start repayment then they better get busy getting the stuff straightened out b/c the info/misinfo/lack of info on the ones serviced by the former fedloan servicing is a mess. my oldest has gotten so many conflicting emails as to who the loans were transferred to that then get contradicted with 'more information to follow'. no idea who is holding the note these days. no desire whatsoever to re-fi b/c we don't want to lose the protections that still exist under the original loans.

 

[Kestryl]

Noone should attack you. All the money sitting in small and medium savings accounts from regular everyday people is what stopped the banking crisis we've seen over the past few months from growing exponentially. The fact that regular people kept their money still which allowed it to be pooled into massive buffers for the banks is what saved the banks as businesses and large depositors got twitchy and pulled their money. This is because regular people don't have more than 250K sitting in a single account in their local banks, a happy & lucky accident. Noone should be annoyed at those who saved & noone should be annoyed at the circumstances that permitted the savings that saved the banking industry from the consequences of their decisions. A very lucky and happy accident indeed.

Thank you for this. We’ve had some frustrating moments where there were comments made by family about those lazy “children” choosing to not pay their loans.