Student Loans repayment started on Oct. 1
Over the summer, the U.S. Supreme Court struck down the Biden Administration’s Student Loan Forgiveness Program, meaning students who had hoped to have thousands of dollars in student loans erased would now have to repay the full amount.
Repayment — which was delayed during the COVID pandemic — started again on Oct. 1. Had the Student Loan Forgiveness Plan been left intact, it would have canceled $430 billion in student debt.
Financial Aid Assistant Director Rachel Sherlock said it means the amount borrowed by students is not forgiven and that students will repay the exact amount that they have expected.
“There is a 12-month grace period to repay,” said Sherlock. “The first of October was just when interest started adding. That’s also the cue for individuals to check to see who their loan servicer is and to make sure they’re in an appropriate repayment plan.”
There are different types of loans that students can apply for, including private loans. Sherlock said undergraduate students are generally eligible for two types of loans through the Free Application for Federal Student Aid, or FAFSA: subsidized and unsubsidized. Subsidized student loans are a need-based form of financial aid that will not accrue interest while students are attending school and six months after they are not attending. Unsubsidized student loans, however, add interest once received.
“If a parent wants to borrow an additional federal loan to assist their undergraduate dependent student loans, a parent could potentially apply for a Parent PLUS student loan,” said Sherlock.
Unlike the stricken-down Student Loan Forgiveness Program, a new proposal, the Saving on a Valuable Education (SAVE), is starting its operations. Some of the changes with SAVE went into effect last Summer.
SAVE is the most recent income-driven repayment plan that brings benefits to students. For example, the amount to be paid is lowered because payments are based on a smaller portion of an individual’s adjusted gross income, while more income for basic needs is shielded from repayment.
The program is available for current and future borrowers with undergraduate or graduate federal loans. However, parents who borrowed Parent PLUS loans are not eligible for the program.
Sherlock said students can find the FASTChoice tool on the MSU website. The FASTChoice allows students to compare private loans side-by-side and find an appropriate option.
For additional help, the Financial Aid office offers advice on loan-related questions and concerns. Sherlock said quick questions can also be resolved by Campus Hub.
“Students can call or email Campus Hub with any questions, but then we also offer one-on-one advising appointments, too,” Sherlock said. “So this is for students who want to sit down with the advisor and walk through, for example, what the different loan repayments are.”
To get help with financial aid questions, students can stop by the Campus Hub 8:00 a.m. to 4:30 p.m. Monday through Thursday, , and 9:30 a.m. to 4:30 p.m. Fridays.
Write to Amalia Sharaf at Amal.Sharafkhodjaeva@mnsu.edu