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Miami Herald
25-06-2025
- Business
- Miami Herald
How to reduce student loans
How to reduce student loans If you've got student debt to repay, you're not alone. An estimated 42.7 million Americans are in the same boat. It's easy to stress over student loans, but take a deep breath. You just need a plan to pay them off - ideally sooner rather than later. In addition to showing you how to lower personal loan costs, Achieve looks at how to reduce student loan debt and unburden your budget. Key takeaways: Income-driven repayment (IDR) plans can help you pay less toward your loans monthly, and possibly get some of your student debt loan refinancing could help you reduce your interest costs and/or lower your payments so you can pay off your education debt and forbearance periods let you take a temporary break from federal student loan payments. 1. Choose the right repayment plan Federal student loans give you a choice about how you repay them. You can opt for: Standard repayment has a 10-year term with fixed repayment lets you pay less in the early part of your loan and more later repayment is designed to help you pay your loans off in 25 years. What if you can't make the payments under any of these plans? Then you can look at income-driven repayment (IDR) instead. IDR plans base your monthly payments on your income and household size. Some plans can put your payment as low as $0. You can take 20 to 25 years to pay off your loans. Any balance left after you've made all of your required payments (including payments for $0) might be forgiven. You can apply for IDR plans through the website. 2. Make extra payments when possible Student loans, whether federal or private, have a minimum payment requirement just like credit cards. This is the lowest amount you can pay each month to keep your account in good standing. Does that mean you can only pay the minimum? Nope, and it's actually a good thing to pay more toward your loans when you can. When you pay more than the minimum, you reduce your interest costs and shorten your payoff window. That could minimize student debt in the long run. Prepayment penalties for federal and private student loans are banned under federal law. So that means your lender can't tack on a fee if you pay your loans off early. Tip: Direct your lender or loan servicer to apply extra payments to the loan principal, not the interest. The principal is the amount you originally borrowed. 3. Consider refinancing Refinancing means you get a new student loan from a private lender to pay off your existing loans. So why do that? It could make sense to refinance student loans if you can lower your interest rate, your monthly payments, or both. You'll generally need good credit (or a co-signer with good credit) to qualify for the lowest rates on a student loan refinance. Here's one important thing to know, however. When you refinance federal student loans, they become private loans. That means you lose access to valuable benefits like: Income-driven repayment plansForbearance and deferment programs that let you temporarily pause loan paymentsEligibility for federal loan forgiveness programs A student loan refinance calculator could help you estimate what you might save, so you can decide if it makes sense. Tip: If you don't want to roll your federal loans into a private loan, you could apply for federal consolidation instead. 4. Take advantage of loan forgiveness and assistance programs The federal government offers several programs to help you reduce student loan debt in exchange for a work commitment. Some of the most popular options for federal loan forgiveness include: Public Service Loan Forgiveness (PSLF). PSLF could erase your federal loan balance after you make 120 qualifying payments and work in an eligible public service role. You can minimize what you pay by enrolling in an IDR Loan Forgiveness. Teachers who agree to a five-year work commitment in an underserved school. Forgiveness maxes out at $17, repayment. Eligible military members could get some of their student loan debt repaid by the federal government. Your state may offer forgiveness programs or other options to help reduce student loan debt. You can contact your state's higher education authority to learn what kind of help may be available. 5. Look into deferment, forbearance, or employer contributions Deferment and forbearance let you take a temporary break from making payments. Federal loans offer deferment and forbearance options. One thing to be aware of is how deferment and forbearance affect interest on federal student loans. Deferment. Interest does NOT accrue on certain types of loans, so you don't have to worry about your balance Interest accrues on all federal loans, which can leave you with more to repay. Obviously, it makes sense to apply for deferments first, but you can only do that so many times. Once you exhaust your deferment period, you'll have to consider forbearance instead. The most important thing is to talk to your lender right away if you can't repay your student loans, so you don't risk default. If you only have private student loans, ask your lender if they offer any type of hardship relief or payment pause. Private lenders aren't required to offer the same benefits the federal government does, but some do. Here's one more tip for how to reduce student debt: Ask your employer to chip in. Some companies offer programs to help you manage student debt. For example, your employer might match the amount you pay every month or agree to pay off a lump sum of your student debt. Check with your human resources department to find out if this might be an option for you. This story was produced by Achieve and reviewed and distributed by Stacker. © Stacker Media, LLC.
Chicago Tribune
10-06-2025
- Business
- Chicago Tribune
Terry Savage: Grace period on student loan repayment is over
Student loans have been looming in the background for more than five years, ever since payment requirements were suspended during the pandemic. During that five-year period, borrowers had several opportunities to reorganize their debts, based on more generous income provisions, to lower the monthly payments. Many took advantage of those plans, and resumed their payments at a lower level. But others simply ignored that huge cloud of debt, since it was not accruing interest during the suspension, until fall of 2023 when interest started accruing again. Of the nearly 43 million people who owe money, only about one-third have made regular payments, according to the Department of Education. At least 5 million borrowers are considered to be in default — not having made a payment in nine months. Millions more are expected to fall into default in the coming months as they are made aware of the repayment restart. Until now, the government did not institute collection procedures. But that grace period ended May 5. And the repayments are coming back with a vengeance. The headline that has shocked many borrowers is the fact that the government is now using its power to grab any tax refunds and other federal benefits, or even Social Security benefits (in the case of co-signing parents). Even more scary, the administration will start the process of garnishing wages on defaulted loans! And default will impact your credit score. All delinquent borrowers should have received an email notifying them of their status. But it's entirely possible that the Department of Education has lost track of your contact information — although not of your Social Security number! It's up to you — the borrower — to make sure that your information is updated. Do that at where you will use your original FSA ID number to sign in. There you can find not only the status of your loans but also who your current servicer is. Most student loans have changed servicing companies at least once, if not several times, since you graduated and first made your repayment plans. It is critical that you get in touch with the company servicing your loan to at least make sure they have your contact information. The next steps depend on whether you can now afford to make the full required monthly payment. For most people that will be quite a chore. But there are still plans (though less generous than two years ago) to help you deal with those payments and create reductions — if you act promptly. At you can learn about and apply for the remaining income-driven repayment plans for which you might qualify. Note that Parent Plus loans might also qualify for income-driven repayment plans, but only after the loans are consolidated. The previous administration's popular Saving for a Valuable Education (SAVE) plan is no longer available because of court challenges to its generous terms. But borrowers can still get into the PAYE (Pay as You Earn) plan, in which payments are capped at 10% of a borrower's income. And if you're able to pay more and want to pay down the loan faster, check out the Income-Contingent Repayment plan. Since these income-based plans are calculated based on family size and your discretionary income, you must recertify each year. Thus, if you are currently on an income-driven plan, it might also be time to recertify at There are several other alternatives for dealing with your student loans. Forbearance is still a possibility to temporarily stop payments or make substantially lower ones. But that won't make the problem go away — and interest continues to accrue. Graduated payment plans can help those whose incomes should rise in the future. And deferment is another possibility in case of extreme hardship. At you can compare the impact of those plans over the long run. And Public Service Loan Forgiveness remains in place, though the Trump administration is already limiting the jobs that are considered public service. Congress is now considering substantial changes to the various student loan plans, including doing away with 'subsidized' loans, which do not accrue interest while the student is still in school. Also on the potential chopping block are graduate student loans. In fact, the administration is even talking about ending or reorganizing the entire Department of Education. But that's not your immediate concern. The real challenge now is figuring out a repayment plan for your current loans. It's tempting to try to forget they exist. But the government is going to find you. And you'll have a lot more options if you find them first — and make an attempt at repayment. And that's The Savage Truth.
Yahoo
02-06-2025
- Business
- Yahoo
Is your Social Security check smaller this month? Here's what it might be, and what to do
If you receive Social Security, Supplemental Security Income (SSI) or both, and you have outstanding student loan debts you haven't been paying, your June check — and potentially future checks — may be smaller. In May, the U.S. Department of Education announced that it would begin 'involuntary collections efforts' against an estimated 5.3 million people who have defaulted on their federal student loans. Previously the government put repayments on pause at the start of the COVID-19 pandemic in 2020, but that has ended, as have some of former President Biden's repayment options and loan forgiveness initiatives. Notices sent out by the Education Department urged borrowers in default to contact their default resolution group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation. To cover the debt owed, those who have not done one of those will see their wages garnished and tax refunds confiscated. And their Social Security benefits reduced. Of the 5.3 million borrowers, an estimated 425,000 are 62 years old or older, according to the Consumer Financial Protection Bureau. Here's what you can do. Social Security benefits have special protections against garnishment, with limits on how much can be garnished by the Treasury Offset Program. Money cannot be taken for medical debts, bankruptcy or civil lawsuits. But it can be garnished, with different limits, to repay child support, alimony or restitution, and debts owed to the federal government, such as student loans. The most that can be taken for federal debts, such as student loans. is 15%, which is not insignificant for people living on a fixed income. Currently, $750 per month of Social Security income is protected from garnishment, which can put recipients under the poverty line. You should have received notice from the Education Department by now if you're in default, and U.S. Secretary of Education Linda McMahon has urged all colleges and universities that receive federal funding assistance to reach out to all former students by June 30 to remind them of their obligation to repay any federal student loan that is not in deferment or forbearance. To be in default, you would need to have 270 days (roughly nine months) of nonpayment for most federal student loan servicers. Check the terms of your specific student loans. After 360 days, loans are transferred to the Department of Education's default collections program. You can also login to a page on the site to see whether your loans are in default Check to see your status, who your servicer is, and the terms of your loan. If you received notice from the Department of Education, read it carefully to see what your options are. Generally speaking, you can: Apply for income-based repayment plans that can lower your monthly payments to make them more affordable Rehabilitate defaulted loans by making nine out of 10 consecutive, on-time, full, voluntary, reasonable and affordable payments Consolidate your loans as part of a loan rehabilitation agreement Continue letting the government garnish your income, which can affect uyour credit rating Pay the debt in full The Education Department notes that depending on a borrower's income, payments under a loan rehabilitation agreement could be low as $5 a month. The Education Department said it will offer support to assist borrowers in selecting the best repayment plan, including a new Loan Simulator, AI Assistant called Aidan, and extended servicers call times. An enhanced Income-Driven Repayment process will simplify the time that it will take borrowers to enroll, according to the Education Department, and eliminate the need for borrowers to recertify their income every year. Keep in mind that under the Trump administration, the staff at the Education Department has been cut nearly in half, so it may be more difficult to reach someone there for help. You may have to make repeat calls to get through. Social Security in Florida: How dependent is Florida on Social Security? Study ranks state, how much people make Supplemental Security Income is a benefit payment for those with limited income or resources aged 65 or older, who are blind, or have a qualifying disability. Children with a qualifying disability can also get SSI, according to the SSA's website. Adults who earn more than $2,019 from work monthly typically do not qualify for SSI. As of April 2025, 543,098 Floridians received SSI payments according to data from the Social Security Administration. Of those, 241,868 were 65 years old or older and 382,925 were visually impaired or disabled. Florida had more than 5 million people claiming Social Security benefits as of December 2023, according to the AARP. That included more than 3.9 million retirees, over 478,000 disabled workers, more than 401,000 spouses or survivors and nearly 240,000 children. Nearly one in five Florida retirees, family members, veterans and others receive Social Security benefits, according to the AARP. This article originally appeared on Naples Daily News: Student loans default may mean a smaller Social Security check
Yahoo
19-05-2025
- Business
- Yahoo
On the Record: How to prevent wage garnishment for defaulted student loans
PEORIA, Ill. (WMBD) — Student loan payments are officially back after the extended pandemic pause, but this time, missing a payment could cost you more than just accumulating interest. A new federal policy allows the government to subject borrowers in default to wage garnishment, sparking concern among students and recent graduates across the country, including here in Central Illinois. 'It's definitely raising concern, especially among students who are juggling jobs and bills. But the good news is you can take action now to avoid it,' said Jon Neidy, vice president of student success at Illinois Central College. Wage garnishment is when money is taken from someone's paycheck, often by court order, to pay off debts like child support, taxes, and now, student loans. According to the U.S. Department of Education, 5.3 million borrowers are in default. Only 38% of borrowers are in repayment and current on their student loans. 'Community college students are often balancing school work and family responsibilities with a policy like this. If borrowers don't have the right information, it could really hit them the hardest. That's why access to clear guidance and affordable repayment plans is critical,' he said. At ICC, Neidy said they prioritize helping students avoid loan default. This year, ICC added a financial aid navigator, who helps students identify ways to pay for college, with loans typically being the last option. 'We help students understand borrowing before they ever take out a loan. And we follow up regularly through their time with us. We have a strong financial team committed to students and their success,' he said. Students are encouraged to regularly check their loan status at and take advantage of the guidance provided to avoid falling into default. 'If you're in default, don't panic. Contact the default resolution group or get into an income-driven repayment plan,' said Neidy. 'The worst thing you can do is ignore it. Help is available and taking that first step can protect you and your paycheck in the future.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Time of India
15-05-2025
- Business
- Time of India
Millions face student loan debt collection in US: Know how to avoid garnished wages
Millions of borrowers of student loans in the United States, who could not pay their bills, now face debt collection for the first time since 2020. As per the latest calculations by the New York Fed Consumer Credit Panel as well as credit bureau Equifax, almost one out of four borrowers, who have payments due, remained behind on loans in the three months till March this year, Financial Times reported. Student loan debt collection restarts The US President Donald Trump-led administration has again started the involuntary collections for federal student loan defaulters. The US government has even announced plans to garnish wages for these borrowers, besides confiscating tax refunds along with the social security benefits. It noted that this will start from "later this summer". 5 5 Next Stay Playback speed 1x Normal Back 0.25x 0.5x 1x Normal 1.5x 2x 5 5 / Skip Ads by by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The Most Gorgeous Female Athletes Ranked. But Did We Get It Right? Click Here Undo At first, all of the 5.3 million defaulted borrowers will be sent 30 days notice. Post that, they will receive garnished wages to cover the unpaid debt, USA Today reported. In the US, student loan borrowers did not face loan collection threat since the onset of the COVID-19 pandemic in 2020. Live Events The US Department of Treasury has now sent 30-day official notice to nearly 195,000 of such borrowers, who failed to pay their student loan amount for at least nine months. Issued earlier this month, the notice informs them about the cut in their federal benefits in early June. How to avoid garnished wages, refund seizures? The best possible way for borrowers is to get in touch with the default resolution group of the US Education Department in order to make their monthly payment. This will help them in enrolling for the income-driven repayment plan or even the loan rehabilitation. However, a major challenge here is said to be the Trump administration's earlier decision to cut its staff by half. Mike Pierce of Student Borrower Protection Center told USA Today that borrowers face a "very hard time" as their calls are getting "dropped" or "bounced around," besides asking them to "hold for hours". When do student loans fall into default? These enter default only after the 270 days of nonpayment period. But it gets transferred to the default collections program of the Education Department after 360 days. suggests that more than 360 days delinquent means that such loans are already in default. Once in default, servicers usually go ahead with the wage garnishment process. It must be noted that the department is not required to take any legal action before it starts collecting a portion of paycheck. FAQs How many student loan borrowers are in default? The Education Department said that around four million of these are in late-stage delinquency (91-180 days). This means, roughly 10 million could end up being in default in "few months" time. How much can the govt garnish to cover student loan debt? Higher education expert Mark Kantrowitz suggests the federal government can garnish up to 15% of the borrower's disposable income to pay back the defaulted loans.
