CHARLESTON, W.Va. –Those who have graduated college and have loans in default will now have to begin repayment again after the five-year pause ended Monday, May 5th.
In April, the U.S. Department of Education announced that they would begin collecting on defaulted federal students’ loans, after not collecting on them since March 2020 due to COVID-19.
Associate Director of Operations for the office of student financial assistance at Marshall University Kourtney Sandefur says that when students are applying for loans, they need to make sure that they understand the terms and when they need to start repaying them after they graduate.
“We don’t keep student loans a secret, so you can visit studentaid.gov at any time and learn about what it means to take out loans, what it means to borrow and what happens after you graduate,” Sandefur said.
Students receive a six-month grace period after they graduate before they have to begin repayment.
The plan to begin collecting again comes almost two years after congress mandated that student and parent borrowers begin repaying again in October of 2023. However, that never happened.
Sandefur encourages those who have defaulted students’ loans to contact their student loan service provider.
“Your servicer is intended to help you not hinder you so if you’re having any issues reach out, they will try to find a path forward that works to their specific financial situation,” she said.
According to the department of education, there are currently more than five million borrowers who have not made a monthly payment in over 360 days and are in default because of it. And over four million borrowers are in late-stage delinquency, which means they haven’t paid between 91-180 days.
Sandefur says that at Marshall they try to minimize how many loans a student has to take out when they are entering college.
“Making sure that their FAFSA is done correctly, telling them about deadlines for grants and scholarship opportunities, our foundational scholarships and where to find outside scholarships,” she said.
Another thing Marshall is trying to achieve is where no student will graduate with student loan debt. They have launched two different initiatives to help them achieve that goal, Marshall for All: Debt Free and Marshall for All: Tuition Free WV. For debt free, Marshall’s goal is to alleviate all student loan debt by 2037.
Sandefur says that these are great opportunities, and she hopes that all students one day will get the chance to participate in them.
“So that does help lessen the burden on students for at least paying for tuition and fees,” she said. “It’s an incredible opportunity and we do hope that our students will be able to take advantage of that.”
Sandefur also said that there are different repayment plans that one could apply for; income driven plans for forbearance which is a repayment plan that is an agreement between the borrower and student loan servicer which will allow for them to temporarily stop making payment.
If people don’t start repayment, they could face wage garnishment or the withholding of federal tax refunds.
For more information you can go to the U.S. Department of Education’s website here.