Frustrated student-loan borrowers brace for payments to resume, but they have repayment options

Sep 20, 2023, 10:45 PM | Updated: Sep 21, 2023, 10:44 am

SALT LAKE CITY — People with student debt have spent the last several years in a political tug-of-war.

First, they were told not to worry about it during the COVID-19 pandemic, then the White House wiped out $400 billion of federal student debt for some students, only to have the U.S. Supreme Court say, no.

Now, payments will start again, but with all the twists and turns surrounding forgiveness, you might see why folks could develop financial malaise.

But with student loan payments scheduled to resume next month, we asked CNET senior editor Nick Wolny to help us make heads or tails of it.

“For many Americans, it’s been over three years since they’ve had to deal with any sort of loan payment,” Wolny said.

Let’s start with the good news for those who worry about whether they can afford to resume paying: If you miss a payment between now and next September, you will still accrue interest, but it won’t hurt your credit.

“There will be a one-year grace period after student loan repayment restarts, in which not paying or requesting deferment or forbearance isn’t going to impact your credit score,” Wolny said.

But most importantly, if you have student debt, you must look into the Saving on a Valuable Education or SAVE plan.

It may “cut in half” what many student-loan borrowers owe. For others, they may owe nothing per month – a $0 monthly payment. It will forgive some loans “after ten years of payments, instead of 20 years.” And it will not charge borrowers with unpaid monthly interest.

Wolny describes this as the SAVE plan’s crown jewel.

“That really prevents any future horror stories of people paying their loans on time, paying the amount that the government told them to pay and their IDR (income-driven repayment) plan and then just watching their loan balance go up and up and up,” he said.

It’s an income-driven repayment plan, meaning the more you make, the less it helps you. But that shouldn’t deter people who are making a good living from signing up, Wolny says.

“I can speak for myself,” he said. “I signed up for the SAVE plan. I have a student loan. And my new student loan payment was less than half of what my previous student loan payment was.”

But a significant factor is that you need to sign up for the new SAVE plan to get the benefits. Because while it’s a law for now, there are opponents in Congress trying to block the plan.

KSL 5 TV Live

Matt Gephardt

Matt Gephardt looking over the CarShield documents for Scott Dumas....

Matt Gephardt and Sloan Schrage, KSL TV

West Haven man says extended auto warranty refuses to cover costly engine repair

Many drivers buy an extended auto warranty to help keep their car on the road, but when the extended warranty a West Haven man bought refused to cover replacing an engine, he decided to Get Gephardt.

2 days ago

Follow @KSL5TVLike us on Facebook...

Matt Gephardt

How hoarding documents puts you at risk for identity theft

Someone who knows what they’re doing can do a whole lot of damage with the scraps of paper you’ve stashed in filing cabinets, drawers and other various hiding places around your house.

3 days ago

FILE: construction zone...

Matt Gephardt

How to avoid hiring a bad contractor

Bobby Main investigates contractors for Utah's Division of Professional Licensing, here's his advice for avoiding bad contractors.

5 days ago

Dave Donegan showing Matt Gephardt the items that were broken in his move....

Matt Gephardt and Sloan Schrage, KSL TV

How liable is a moving company if your stuff gets damaged?

Dave Donegan’s home was just about to go into renovation, so he hired a moving and storage company to hold onto his household goods while work was underway.

9 days ago

FILE - The Amazon app is seen on a smartphone, Tuesday, Feb. 28, 2023, in Marple Township, Pa. (AP ...

Matt Gephardt and Sloan Schrage, KSL TV

Get Gephardt helps solve Amazon misdelivery mystery for Manti man

Most of us are ordering more and more things online, and it's sometimes frustrating with things like an Amazon misdelivery mystery.

18 days ago

Scrolling social media, Joyce Lake spotted an ad for a doll. However, not only did the doll not sho...

Matt Gephardt

Imposters are using trust in law enforcement to scam Utahns

Scrolling social media, Joyce Lake spotted an ad for a doll.

19 days ago

Sponsored Articles

Women hold card for scanning key card to access Photocopier Security system concept...

Les Olson

Why Printer Security Should Be Top of Mind for Your Business

Connected printers have vulnerable endpoints that are an easy target for cyber thieves. Protect your business with these tips.

Modern chandelier hanging from a white slanted ceiling with windows in the backgruond...

Lighting Design

Light Up Your Home With These Top Lighting Trends for 2024

Check out the latest lighting design trends for 2024 and tips on how you can incorporate them into your home.

Technician woman fixing hardware of desktop computer. Close up....

PC Laptops

Tips for Hassle-Free Computer Repairs

Experiencing a glitch in your computer can be frustrating, but with these tips you can have your computer repaired without the stress.

Close up of finger on keyboard button with number 11 logo...

PC Laptops

7 Reasons Why You Should Upgrade Your Laptop to Windows 11

Explore the benefits of upgrading to Windows 11 for a smoother, more secure, and feature-packed computing experience.

Stylish room interior with beautiful Christmas tree and decorative fireplace...

Lighting Design

Create a Festive Home with Our Easy-to-Follow Holiday Prep Guide

Get ready for festive celebrations! Discover expert tips to prepare your home for the holidays, creating a warm and welcoming atmosphere for unforgettable moments.

Battery low message on mobile device screen. Internet and technology concept...

PC Laptops

9 Tips to Get More Power Out of Your Laptop Battery

Get more power out of your laptop battery and help it last longer by implementing some of these tips from our guide.

Frustrated student-loan borrowers brace for payments to resume, but they have repayment options