BALTIMORE — Student loan borrowers have a few extra months before making payments again.
“We did our own survey of over 33,000 people in November and we found that 9 out of 10 student loan borrowers were not financially secure enough to resume payments,” said Cody Hounanian, executive director of the Student Debt Crisis Center.
The Student Debt Crisis Center supports the Biden Administration’s decision to give borrowers another 90-days delaying repayments until May 1, however, it only applies to certain federal loans owned by the U.S. Department of Education none that are privately owned by banks, credit card companies, or other lenders.
“Those have not been covered by any of the federal pandemic relief for student loan borrowers, so those people should contact their lender and see if the company itself is offering any kind of special relief during this time,” said Hounanian.
Scammers are also capitalizing on confusion surrounding these program changes.
“This message is from the Department of Education, all student loan forgiveness will be stopped immediately. In order for you to qualify you must apply in the next 24 hours or you will not be able to have your student loan reduced,” according to a voicemail from the Federal Trade Commission.
The FTC said this voicemail is a scam preying on borrowers unaware that the student loan pause has been extended.
And while the Student Debt Crisis Center is in favor of proposals eliminating student debt, borrowers need to begin thinking about how they’ll pay their loans including enrolling in repayment plans.
“These options can help lower your monthly payment based on your income, so for people particularly hurt by the pandemic, lost their jobs, faced reduced hours, there are programs that can help you out right now and throughout the next year ahead,” Hounanian said.
In addition to these changes, millions of people will see that their loan servicer has changed, and more people may temporarily qualify for the Public Service Loan Forgiveness Program, so it’s important to make sure that all of your information with your lender is up to date including email and address to receive any information and updates having to do with your loan.