NASHVILLE, Tenn. (WTVF) — If you’re struggling to pay your student loans, you’re not alone. More borrowers are missing payments, and confusion about overdue dates isn’t helping.
On top of all that, interest on SAVE plan loans is back, which impacts millions of Americans with student loans. But there are things you can do now, before collectors come after your paycheck or tax refund.
Nearly 6 million Americans are at least three months behind on their federal student loan payments, according to research from TransUnion and the Federal Student Aid office warns that many delinquent borrowers are in danger of defaulting in the coming months.
For borrowers like Dorien Rogers the stress isn’t just numbers on paper. It’s tens of thousands of dollars in debt that shape everyday choices about housing, transportation, and even long-term goals.
“If I miss one payment then you know the interest is gonna capitalize on itself and I may not be able to pay it all back does that mean that it's gonna rupture my credit does that mean that I can't do the things that I want to do not just as an American citizen but as someone who wants to live their life as a 25 year old,” said Rogers.
And those concerns are real!
The day you miss a payment, your loan is considered delinquent. After 90 days, it’s reported to the credit bureaus, hurting your credit score. And if the delinquency continues, it can tip into default, bringing even tougher consequences.
“You want to do everything you can to keep your loans out of collections," said Consumer Reports' Chuck Bell. "Once they get there, you’re in real trouble because debt collectors can take part of your paycheck, your tax refund, even your Social Security payments.”
If you're facing this tough reality, Consumer Reports says call your loan servicer. Ask about your options and find out which repayment plan matches your current financial situation.
And if you’ve already slipped into default, the Department of Education says there are two main ways out.
One path is loan rehabilitation. What you’ll need to do depends on your loan type and who holds it, so reach out to your loan holder. For Direct Loans or FFEL Program Loans, you agree to make affordable monthly payments within 10 months. Once you’ve completed that, your loan is no longer in default.
The other option is loan consolidation. – It lets you roll one or more defaulted loans into a single new loan, meaning one monthly payment. But keep in mind, you could end up paying more in interest over time.
“Whichever path you choose, the key is not to ignore the problem. The sooner you act, the more options you’ll have to get back on track,” said Bell.
And regain control of your loans.
And watch out for student loan scams...anyone promising fast debt relief. They may charge big fees or even steal your personal information. And Always be sure to check with your loan service before agreeing to anything.
Do you have more information about this story? You can email me at jennifer.kraus@newschannel5.com.
I'm so thankful Robb Coles highlighted the Kamer Davis clinic in Hermitage and the hardship that may force its closure. The clinic provides care for patients with intellectual and developmental disabilities and there is no other place like it nearby. You can tell the staff is so passionate about the care they provide. I hope by shining the light on this, the right person can step in and make a difference.
- Carrie Sharp
