Student Loan Repayment: Should the Pause Continue?
The student loan payment freeze ends May 1, 2022, but Persis Yu with watchdog group Student Borrower Protection Center says there may be a reason to continue the pause for a non-COVID reason.
“Two of the biggest student loan managers left the program,” she says.
Yu worries about the readiness of managers to handle the influx of repayments for the millions of loans that had to be transferred.
However, some borrowers will not have to worry about repaying their loan.
If you have a loan managed by Navient, your balance may have been cancelled.
Navient has reached a $1.7 billion settlement over allegations of deceptive practices. This means that the balances of 66,000 borrowers will be cancelled.
If you do not have one of these loans, the government has put in place limited means for your loans to be forgiven.
“For people who have permanent and total disabilities for example, or who went to schools that cheated them,” Yu says.
There is also forgiveness for certain public service jobs, such as teaching.
Check if you qualify for government loan relief.
Yu spoke about student loans on an ABC15/Let Joe Know Facebook Live.
One area of concern is borrowers having difficulty repaying their loans.
Yu says there are longer term payment plans if you check with your repairman.
If you’re looking to refinance, she warns you to check out exactly what you’re getting yourself into.
If you go with a private lender, Yu says you risk losing some of the protections you would have with a government loan.
And you shouldn’t have to pay any fees to refinance.
“Some of the scams we see are companies promising to refinance their loans under the Direct Loan Program for a thousand dollars,” Yu said.
Consult the Student Borrower Protection Center website to find out about your rights as a borrower.