Student loan repayments start again: What borrowers should know about SAVE plan
NEW YORK -- The more than three year pause on student federal loan repayments is now over. This means millions of borrowers will once again be responsible for their student loan debt payments.
"The number one thing to know is that you should not be stressing out to the point where you're not taking affirmative steps to get a handle of payments," said Carolina Rodriguez, Director of Education Debt Consumer Assistance Program.
Education Debt Consumer Assistance Program, also known as "EDCAP," helps student loan debt borrowers in New York State.
"One of the first things you want to do is know who your student loan servicer is," said Rodriguez. "The second thing you want to make sure you take is enroll in an affordable plan. There is a new plan called SAVE."
The federal government is now offering the SAVE plan, which can lower the monthly payment amount. Payments are based on the borrower's monthly income and the size of their family.
For example, a single person making $60 thousand a year will pay $227 dollars a month. But a parent in a family of three making $50 thousand pays zero. Those zero payments count toward total loan forgiveness, which kicks in at anywhere from 10 to 25 years, depending on the type of loan and loan amount.
SAVE also treats interest differently: For example, if a borrower qualifies for a low monthly payment of $30, but their interest is $50, they won't be charged that additional $20.
"If someone is asking you to pay them, that is likely a scam. What we're seeing right now are cold calls, meaning people are going to call you or they're going to tell you that you are eligible for a zero-dollar required payment and they might even mention the latest repayment plan," said Rodriguez. "Do not give your information. The federal government right now doesn't have time to call borrowers. You can always just get their phone number hang up and try to call and verify. Often times when people call back, they often find out the number doesn't actually exist."
CLICK HERE for more information from the federal government.