I just made my 1st payment in October ….Here’s what I know about the 2023 update

Today, October 11, 2023, my first payment resumed. This month is the start for all borrowers. I hated giving that payment up. But I’m obligated to pay what I owe. I knew what I was getting into when I signed my name on those documents while attending undergrad. With the new updates, many people have options and cushion. If you aren’t financially ready to make payments, don’t sweat it!
Here are a few things to know, going into 2024 year:

If you happen to miss a payment or 2 within a year, don’t panic

Life happens! You will not be hit with delinquency notices nor will it affect your credit scores. You have some breathing room for 1 year. After that, you are solely responsible for getting back on track and making arrangements to pay towards your balances.

Interest is still accruing daily

Understand the effects of interest and how student loans work. It’s accruing daily and that a amount is constantly being added to your total balance. You could possibly end up with hundreds of dollars accrued within 1-2 years.

Different payment plans have been created and more affordable options

Thanks to the Biden Administration, variety of new plans have been created to meet your financial needs. Surprisingly, more affordable options are available.You could even get lucky and have your balance reduced to $0 a month.

Also, with SAVE plan, borrowers can see their loans forgiven after 10 years , instead of 20 long years, if they initially had balances of $12,000 or less.

You get a fresh start

Have you defaulted on your student loans before the Pandemic?
Put your mind to ease. If you’ve defaulted before the Pandemic, you’ll get a brand new reset. Your loans will be taken out of default. This may even improve credit. Now is your time to get on board and keep up with your student loans.

Your best defense will always be communicating

Although, you get 1 year break from not seeing defaults, this doesn’t mean you “do nothing”! Always call your loan provider and update them on your financial status. They are willing to work with you and your needs. Some borrowers are getting lucky and have their monthly payment reduced to $5 or $0 a month. A win is a win! Communication is key.

Take away

In summary, many borrowers hoped the student loan forgiveness would have applied to all. That hope was thrown out. I’ve always lived by the phrase, “ If you owe it, pay it!” I plan to tackle my student loans and pay until it’s completed paid off. I’m incorporating some of Dave Ramsey methods to attack each debt from smallest to largest. Check out the snowball method and Avalanche method. I’m motivated to get to the finish line and become debt-free.

Check out other helpful tips to help you get on track with your finances.