After 3.5 years of no payment and interest the party is finally over. Interest will begin accumulating September 1st and payment are due in October. With so much change happening in the student loan realm, however, we know this can be a very confusing time for borrowers. So, we’ve put together the below guide to make your return to payment (or start of payment) easy peasy!
First and foremost, it’s important to note that borrowers who were on the REPAYE plan are automatically being switched over to the new SAVE plan. There is no application to fill out, income documentation is not required, and your repayment cycle will not start over. If you were 5 months into your REPAYE cycle when the payment pause kicked in, you’ll pick up with payment #6.
However, if you were on IBR or PAYE, and want to get on the SAVE plan, you will need to do the opposite of everything I just said: application, income documentation, and a new payment cycle. I want to emphasize caution here. Most borrowers still have payments based on 2018 or 2019 tax returns, which could be lower than payments under the new SAVE plan. So, you might want to compare the two and consider switching to SAVE when your next recertification rolls around. We can help you with that decision. And if you’re not familiar with the SAVE plan, click here for our thorough breakdown.
Payment Plan, Recertification Date, and Payment Amount
You obviously want to verify these three things. Most borrowers are currently receiving notices which provide all three pieces of information from their servicers, so check your email and/or servicer inbox. But if you want to look it up, here’s how:
- Mohela (most DWOQ clients are with Mohela): Log in, click on Repayment Options, and then Income Driven Repayment Details. You will see your payment plan, payment amount and your recertification date
- Other servicers: Many other servicers have a banner on the home page when you log in to your account which should have this info. Your loan servicer has to notify you 3 weeks before your payments resume with your payment amount and your payment start date. So, be checking your inbox at your servicer account.
You should see a payment date listed for some time in October. Although payments were supposed to resume in September, an administrative forbearance was put in place for all Direct Loan Borrowers. Interest will still accrue in September, and then depending on your specific payment plan, you may receive an appropriate interest subsidy. While looking up your information, we recommend you take note of your recertification or payment plan end date. More on that in a moment.
Additionally, the administration is allowing a “12 month on-ramp” for borrowers who legitimately cannot afford to make a payment right now. However, if you are employed and want PSLF/IDR forgiveness credit, and to potentially gain access to interest subsidies, we encourage you to resume payments at this time.
Autopay (ACH) Considerations
Servicers turned off everyone’s autopay at the beginning of the payment pause. So make sure to check your banking information, payment date, other settings, and turn it back on! As a reminder, enrolling in autopay reduces your interest by .25%. This is a good time to verify the rest of your profile settings and contact info as well.
Personalized Student Loan Consultations
With all the changes which have occurred this summer this is the perfect time to establish a comprehensive loan repayment strategy, or perhaps revisit your plan to see if changes are needed. Our team can walk you through all of the recent and upcoming changes, run a detailed payment/savings forecast for you, and answer all of your questions. Click here to learn more and get started.
Brandon Barfield is the President and Co-Founder of Student Loan Professor, and is nationally known as student loan expert for graduate health professions. Since 2011, Brandon has given hundreds of loan repayment presentations for schools, hospitals, and medical conferences across the country. With his diverse background in financial aid, financial planning and student loan advisory, Brandon has a broad understanding of the intricacies surrounding student loans, loan repayment strategies, and how they should be considered when graduates make other financial decisions.