Many student loan borrowers missing opportunity to find debt relief in SAVE plan: survey

A recent survey shows that many student loan borrowers are still unaware of the benefits of income-based repayment plans. (iStock)

According to a recent Student Debt Crisis Center (SDCC) report, many borrowers currently struggling to pay their student loans would benefit from enrolling in an income-based repayment plan. investigation.

According to the survey, about three out of four borrowers with annual incomes of less than $75,000 who would benefit from a SAVE plan are not currently enrolled in the plan. Additionally, 38% of these borrowers are at risk of defaulting on their student loan payments after six months and may be missing out on opportunities to find debt relief in existing programs.

President Joe Biden’s Savings for Valuable Education (SAVE) plan could lower monthly payments for borrowers to $0, cutting monthly costs in half and saving people at least $1,000 a year. be. This new IDR plan was announced after the Supreme Court struck down Biden’s student loan forgiveness plan.

“These findings reflect what borrowers have experienced over the past six months since repayments resumed,” said SDCC Founder and President Natalia Abrams. “We’ve come this far advocating for much-needed relief for millions of borrowers, and it’s great to see action from the Biden administration. But it’s important to know that help is available now for borrowers. The communication of these critical resources is critical for debt relief.If the borrower is not aware of it, there is a lack of available resources and relief can reduce the monthly payment or eliminate the debt altogether. You won’t be able to take any action.”

If you have private student loans, you can consider reducing your monthly payments by refinancing your loans to a lower interest rate. Visit Credible to talk to a personal loan expert Please answer the questions.

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Student loan servicers remain inaccessible

According to the SDCC survey, more than half of borrowers who contacted their student loan servicers with questions about restarting their loans had their questions unanswered. Additionally, one-quarter of borrowers do not trust the information they receive from their servicer, and 75% say the information they receive is inaccurate or incomplete.

All student loan borrowers are assigned a loan servicer who helps them choose repayment options, such as income-driven repayment (IDR), which can make payments more affordable.

In November, the Department of Education withheld $7.2 million in payments to student loan servicers, citing multiple billing errors that caused borrowers to go into delinquency as payments rose again in early October. According to the ministry, debt collector MOHELA: Could not send Bills were delivered on time to 2.5 million borrowers, with some receiving their statement within just seven days of the payment date. The servicer must send the invoice to the borrower at least 21 days before the repayment date.

“We regularly hear from borrowers that their loan servicers provide them with inaccurate information or no information at all,” said SDCC Managing Director Sabrina Karazance. “As a student loan borrower myself, I know firsthand how frustrating and harmful such communication errors can be. We need more communication coming directly from the ministry.”

If you are having trouble paying your private student loans, there is no federal relief available to you. You may also consider refinancing your loan at a lower interest rate to reduce your monthly payments. Visit Credible to see personalized rates in minutes.

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Billions in loans forgiven, rescue plan underway

More than $136 billion in student loans have been forgiven for more than 3.7 million Americans, even though the Supreme Court blocked Biden’s original forgiveness plan.

The White House said the new forgiveness block will affect borrowers such as teachers, nurses, firefighters and other individuals who earned forgiveness after 10 years of public service. statement. The latest announcement will forgive up to $5 billion in student loans, bringing the total number of Americans with debt forgiveness to more than 3.7 million Americans.

Starting in February, the following borrowers will Minimum 10 year payment Those who initially borrowed $12,000 or less for college funds had their remaining debt wiped out as long as they were enrolled in the SAVE plan. As of early January, he had 6.9 million borrowers already enrolled in his SAVE plan, and more than 3.5 million had at least $130 billion in student loan relief.

Additionally, the Biden administration is focusing on a new amnesty program. The plan is available to borrowers whose balances exceed the original amount borrowed, who began repayments for the first time a long time ago, who are eligible for relief but have not applied, or who have sufficient monetary and economic value. It is intended to provide relief to borrowers who were enrolled in programs and institutions that were unable to deliver. Difficult.According to a recent Forbes report, regulations for the plan could be ready by May, and registration could open as early as this summer or fall. article.

If you’re struggling with private student loan debt, you may want to consider refinancing to a lower interest rate. Visit Credible to speak with a student loan expert and get your questions answered.

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