If you miss the first payment, don’t panic. Just contact your servicer and make arrangements to become current.
How will any potential loan cancellation be factored in?
Millions of borrowers could see up to $20,000 of their balance disappear if the Supreme Court allows the Biden administration to move ahead with its debt cancellation plan. (A decision is expected by the end of June.) The program would cancel $10,000 of debt for single individuals earning under $125,000 and married joint filers and heads of households with income under $250,000. Borrowers who received Pell Grants and fall under the income ceilings can qualify for another $10,000 in debt relief.
Debt cancellation would be automatic for borrowers who already submitted applications and had them approved, as well as those who didn’t need to apply because the government already had their information on file, borrower advocates said. Those who applied but haven’t yet received approval wouldn’t need to do so again.
Payments would be recalculated based on your new balance.
Payments for borrowers already enrolled in income-driven plans, however, generally wouldn’t change even if a portion of their debt was canceled. That’s because their payments are based on their discretionary income and household size.
I can’t afford my loan payment. What are my options?
Thankfully, federal borrowers have many options. But having so many choices can also be paralyzing, especially when they each have different eligibility rules and outcomes. But there are generally three categories:
Fixed payment plans: These include standard (fixed payments), graduated (your payments rise) and extended (you pay over a longer time) repayment plans.