Welcome back. Today Betsy May out,
The President of the Institute of
Student Loan Advisors is here to
answer student loan related questions.
This question is if during your
default you become disabled,
is there a contingency on
how you're to pay your debt?
So the nice thing about federal student
loans is that there are discharges
if something really bad happened,
such as a permanent disability.
If you're unable to work due
to your illness or disability
and not expected to improve,
you can apply for disability discharge
and the whole thing gets wiped away.
The place to go for information on that
and to apply is disabilitydischarge.com,
which, believe it or not,
is the department events website
okdisabilitydischarge.com.
All right. This next question is,
can I still ask for hardship or
forbearance if I can't afford my
payments when they start in October?
You absolutely can call the servicer
and ask for what's called the
discretionary forbearance if you
are unable to afford the payments.
But I strongly suggest that people
look into the income driven repayment
plans first because though you might
end up getting some interest subsidies
along the way and it's more of a longer
term solution than forbearances.
OK. And then this next question
kind of goes without what
happens if you don't have a job?
Is there a way to adjust your payments?
Yeah, so there's two options there.
There there is something called
an unemployment deferment,
which will postpone payments while
you actively seek fulltime work.
But again, a better,
maybe longer term solution might be to
look at one of the income driven plans.
If your income is low because all
you're getting is unemployment
benefits or maybe nothing at all,
your payment's going to be 0
under the income driven plan.
So that's someone I would strongly
suggest would look into the SAFE plan
rather than the unemployment deferment.
OK, And then this person saying,
can I still apply for the SAVE
program if my federal student
loans are already in deferment?
The short answer is no.
You can either be on a repayment
plan or you can be in deferment,
not both now depending on
what kind of deferment it is.
If you would prefer to progress
on the SAFE plan instead,
you can ask for that deferment
to be removed and then apply for
the SAFE plan and get on it.
That's not the case for all situations,
but most deferments can be removed
at the request of the borrower.
Okay, what is the interest
rate on student loans?
Well, that depends.
When you took the loan out,
the interest rates are set by Congress.
Any federal student loan that has
been taken out since 2006 has a fixed
interest rate and the rate changes
depending on when you took the loan out.
So borrowers taking loans out now,
so after July 1st of 2023,
their rates are higher because of
where we're at in the economy than
people who took loans out last year.
So right now, you know,
loans being taken out this year,
for undergraduate Stafford
loans it's around 5%,
for graduate loans it's around 7:00
and for parent plus it's around 8:00.
But say people who took loans out back in,
say, 2008,
it was a fixed rate of 6.8%.
And we've seen everything in
between during those years.
We've got a little bit over a minute
what's what's the thing that you
want people to come away with about
knowing about student loans? Right now,
the best favor you can do for
yourself is educate yourself
about your student loans.
So many of the people we work
with start off by saying that
they're anxious or overwhelmed.
But if you just spend, you know,
45 minutes on the student aid
website and read the things
and play with the calculators,
you're going to have a lot more
confidence and be able to manage your
student loans a lot more effectively.
Right. And let's put up that website
because that is the go to website.
You don't know who's got your loan.
You don't know how much your loan is.
You don't know when your payment is due.
Student Aid Gov is the
best resource for that.
That is the Department
of Education's website.
It's going to let you know who has your loan
and all of the other information as well.
Betsy, thank you so much as always.
You are answering all of the
questions that we need answered.
We will have you back again for October
when the payments actually start.
Hey, if you missed any of this,
this is what we want you to do.
We want you go to the the WF&Y News two.com.
Look at the two wants to know section.