Nelson: As student loan payments resume, borrowers should be aware of their options
Student loan payments resumed in October after being frozen for three years due to the pandemic, meaning most borrowers will need to start making monthly payments on their student loans again. More than 800,000 Minnesotans had outstanding student loan debt as of June 30, owing a cumulative $27.1 billion.
“The soaring costs of college tuition are placing an enormous financial burden on young people throughout Minnesota and this country,” Senator Carla Nelson (R-Rochester) said. “We cannot continue down this unsustainable path that forces students to take on crippling debt to obtain a degree. These heavy debt loads make it incredibly difficult to achieve post-college goals like buying a home, getting married, or starting a family.”
“That is why I am committed to advancing career pathways and pipelines to jobs like P-Tech, C-Tech, Bridges to Healthcare, and Post Secondary Enrollment Options (PSEO),” Sen. Nelson added. “These pathways and pipelines allow high school students to earn tuition-free college credits, graduate from college sooner with less debt, and provide more direct job training. We must get tuition inflation under control and make higher education more accessible and affordable for all students.”
Some borrowers may continue deferring their loan payments if they qualify for an exemption. Potential exemptions include cancer treatments, economic hardship, military service, and unemployment.
OPTIONS FOR BORROWERS:
There are a number of options available to borrowers who are struggling to make their student loan payments.
- One option is to apply for the new federal SAVE Plan, which is an income-driven repayment plan. It calculates monthly loan payments based on income and family size. As of early September, about 74,000 Minnesotans had applied for the SAVE Plan. Enroll here: https://studentaid.gov/announcements-events/save-plan
- Another option is to apply for a deferment or forbearance. Deferment and forbearance are temporary options that can help borrowers who are temporarily unable to make their loan payments. Learn more: https://studentaid.gov/help-center/answers/article/difference-between-deferment-and-forbearance
RESOURCES AND INFORMATION
- The Education Department’s federal student aid website contains information that will help borrowers figure out their account balance, see a summary of their federal loans and grants, find their loan servicer, and more. It also has a chat feature to help you find your loan and grant information.
- The Education Department also published a useful guide for individuals who are restarting their payments.
- Axios published information to help borrowers find their student loan information, locate their balance, and connect with their loan servicer.