The federal student loan payment pause that began in the early days of the COVID-19 pandemic has officially come to an end. Federal student loan interest resumed on September 1, 2023, and loan payments restarted on October 1, 2023. This development, while anticipated, can still pose financial challenges for many borrowers. If you’re among those returning to student loan payments, it’s crucial to be well-prepared. Luckily, Members Exchange Credit Union (MECU) has your back.
Understanding the Resumption of Payments
Over the summer, the U.S. Supreme Court struck down the Biden Administration’s Student Loan Forgiveness Program, meaning that students who had hoped for debt relief would now have to repay the full amount. Repayment, which was delayed during the COVID pandemic, resumed on October 1. This date is a cue for borrowers to check their loan servicer and ensure they’re on an appropriate repayment plan. Now is the perfect time to get your finances in order and plan your strategy for loan repayment. MECU offers several pieces of advice and resources to help you find your way around the process.
Plan Your Approach
Returning to student loan payments requires careful planning. This is where MECU can provide valuable resources and guidance to help you manage the transition. Let’s explore some steps to prepare for the resumption of federal student loan payments:
- Create a Budget
Assess your current financial situation and create a budget. This is a critical step in determining how your student loan payments will fit into your monthly expenses. GreenPath’s Aligning Priorities Online Course can help you prioritize your expenses and make necessary adjustments.
- Seek Expert Advice
MECU collaborates with GreenPath Financial Wellness, a non profit financial wellness organization, to provide its members with free financial counseling. By calling GreenPath at 1-877-337-3399 or requesting a call on their website, you can connect with NFCC-certified financial counselors. They can help you strategize budget changes and understand your student loan repayment options, all in a free, confidential, and no-pressure environment.
- Use Helpful Resources
MECU offers useful tools, including our free Financial Calculators and our blogs, Student Loans 101, and Budgeting Basics, which can assist you in planning your next steps. By using every resource at your disposal, you can maximize your ability to successfully navigate the loan repayment process.
Consider Loan Consolidation
If managing multiple student loans has become overwhelming, consolidating your loans might be a smart move. By consolidating your loans with MECU, you can simplify your repayment process, potentially secure a lower interest rate, and even reduce your monthly payments. This will make your financial planning more convenient and less stressful. Learn more about MECU’s student loan options.
Watch Out for Scams
Unfortunately, the resumption of student loan payments also presents an opportunity for scammers. Be cautious and skeptical of any emails or advertisements that promise to forgive your loans or settle them on your behalf. Always be vigilant when it comes to your financial information. If you’re looking to settle your debt with the federal government, visit studentaid.gov to ensure that you’re dealing with reputable sources.
Remember: There is Life After Debt
While repaying student loans can be challenging, remember that these payments are investments in your future. Your degree will likely increase your earning potential significantly. Plus, the skills you gain in budgeting and managing your finances during this period will serve you well throughout life.
Moreover, building a strong credit history by making timely student loan payments will put you in a good position for other financial milestones, such as buying a car or a home. This experience will teach you valuable lessons about living within your means, which can lead to a more secure financial future.
Let MECU Help
The resumption of federal student loan payments is a significant financial milestone, and it’s essential to navigate it wisely. MECU is here to help you every step of the way. Our partnership with GreenPath Financial Wellness provides you with access to free financial counseling and resources to ensure that you are well-prepared for this transition. Remember, at MECU, we’re committed to your financial well-being. If you have any questions or need assistance, please contact us. Your success is our priority!
Disclaimer: The information provided in this blog is for educational purposes only and does not constitute financial advice. Interest rates, terms, and eligibility criteria are subject to change. Please consult a qualified financial professional before making any financial decisions.