BUFFALO, N.Y. — Starting next week, millions of people who took out student loans will have to start paying them back again.
Not everybody will have payments due October 1, but you should log into your account now to find out when your student loan payment is due.
On Monday, 2 On Your Side talked with Sarah Foster, an analyst with Bankrate. She says about 44% of borrowers have a new servicer since they last made payments before they went on pause during the pandemic.
If you are worried about being able to afford your payment, Foster says the new SAVE Plan might be for you.
"Americans who make about $33,000 or $32,000 a year within that window, you might not have to make a payment more than zero dollars a month because the way that the Department of Education determines the amount of income that is subject to payment, your so-called discretionary income, that's actually increasing so you theoretically might not really see, you know, this could be the cheapest payment plan out there for you," says Bankrate analyst Sarah Foster.
Foster says the reason for that is next July, payments will be based on 5% of that discretionary income for undergraduate borrowers instead of 10%
Foster says this is also a good time to look over your budget to make sure you're saving money if you can.
"The common rule of thumb is to make sure that you have found a payment plan that hasn't kept you from at least taking advantage of your employer match for your 401k, for example, or hasn't kept you from contributing to an emergency fund. I think, you know, the reason why we say that is because an emergency fund is really that barrier between you having to accrue up and upwards of 20% interest on a credit card in case an emergency expense pops up and credit card debt can be even more manageable and even higher cost than student loan debt," says Sarah Foster.
There is a grace period through the end of next September where if you miss a payment it won't be reported to the credit reporting agencies.
To learn more visit studentaid.gov