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Empowering Yourself with Student Loan Repayment

12/2023

Several months ago, a new chapter began for student loan borrowers as payments resumed following a three-year hiatus. Since this restart, numerous individuals have faced financial challenges arising from the reinstatement of payments.

We are here to assist you in exploring potential avenues for saving money on your student loan payments while maintaining financial responsibility.

Consider Repayment Plans

Researching your options to the right repayment plan is essential. According to information provided by the U.S. Department of Education’s Federal Student Aid Office, you may be able to choose from various repayment options tailored to your financial circumstances.

Some options include:

  • The Standard Repayment Plan, which aims to clear loans within a 10-year period through fixed monthly payments.
  • For borrowers with higher earned salaries, the Extended Repayment Plan is another consideration. This plan, designed for individuals with elevated incomes, features fixed payments ensuring loan payoff within a 25-year timeframe.
  • For those prioritizing affordability, Income-Driven Repayment Plans offer an alternative. These plans calculate monthly payments based on the borrower's income, with the SAVE Plan being one example. In this plan, payments are recalculated annually, factoring in changes in income and family size.

Tips for Navigating Student Loan Payments

Here are some tips that you may find helpful as you make your student loan payments.

  • Create a Budget: A well-planned budget is your most powerful tool for managing student loan payments. Allocate a portion of your monthly income to cover loan payments while ensuring you have enough left for essential expenses.
  • Set Up Automatic Payments: Setting up automatic loan payments can simplify the process and ensure that you never miss a due date. Many lenders offer interest rate discounts to borrowers who enroll in automatic payments, saving you money in the long run. Verify the terms and conditions of your specific loan program to see if this option is available to you.
  • Communicate with Your Loan Servicer: Open communication with your loan servicer is key to addressing any concerns or difficulties you may encounter. If you experience financial hardship or believe you may struggle to make payments, reach out to your loan servicer. They can help you explore alternative payment plans or deferment options.

Student Loan Scams are on the Rise

According to the Federal Trade Commission, 495,855 fraud claims were reported in the first quarter of 2023 (Per the Federal Student Aid’s article here.) Unfortunately, student loan scams are a major part of this problem, targeting individuals seeking financial aid for education or those already burdened by student loan debt. Scammers employ various tactics, such as phishing emails, unsolicited phone calls, and fake loan consolidation offers, to lure unsuspecting victims.

Some common student loan scams to be on lookout for, according to the U.S. Department of Education, include:

  • Robocalls/Texts: Automated phone calls or text messages may promise student loan forgiveness or lower interest rates. These calls are often unsolicited and should be treated with skepticism.
  • Pressure tactics: Scammers may use high-pressure tactics to coerce individuals into making immediate decisions without proper research or understanding.
  • Promises that seem too good to be true: Scammers may request an up-front or monthly fee while promising student loan forgiveness, but government programs typically require years of qualifying payments or employment in certain industries before forgiving loans. A good way to look at this is if something seems too good to be true, it probably is. Trust your gut.

To read more about student loan scams and what to do if you believe you may have been targeted by a fraudster, check out the Federal Student Aid’s article on student loan scams here.

We're here for you!

At Advia, we understand that student loans can be stressful, but we want to ensure you that we are here to help provide support with your financial journey. To learn more about how we may be able to help, visit here.

Sources:

Federal Student Aid (Office of the U.S. Department of Education): https://studentaid.gov/manage-loans/repayment/plans

Federal Trade Commission/ Federal Student Aid article: How to Avoid Student Loan Forgiveness Scams – Federal Student Aid

Advia Resources: https://www.adviacu.org/loans/resources/advia-can-help