CORPUS CHRISTI, Texas — Earlier this week, KRIS 6 reported that the Federal Government will start collections on defaulted student loansnext month.
The new message is "Don’t panic!"
If involuntary collections sound scary, you can avoid problems by getting to them before the Federal Government does.
Director of Financial Aid Services at Del Mar College Jospeh Ruiz said there was a national payment pause during the pandemic. But that pause was lifted about a year ago.
“About a year ago, people were encouraged to start making payments. Some did and others chose to hold off a bit longer,” Ruiz said.
Those who defaulted will have their debt collected starting early next month. But Ruiz said it can be on your terms.
“There are definitely options for them. They don’t have to stay defaulted or remain in that type of delinquency,” Ruiz said.
Those who have defaulted can call their loan servicer to set up a repayment plan.
“Their sole responsibility is to collect that student loan, and they will make every effort to try to work it out with you,” Ruiz said.
A servicer is an agency that collects a student loan on behalf of the Federal Government.
“There are about twelve nonprofit groups like Nelnet and Mohela,” Ruiz said.
To find out who your servicer is, just head to studentaid.gov, click on loan repayment, and go to Who’s My Loan Servicer. You will be asked to answer a couple of questions.
And when you do set up that repayment plan, you don’t need to pay a huge portion a month.
“There are income-based repayments that they can make a decision based on their income. If they can afford a smaller monthly payment, they could be paying as little as ten dollars a month, but they have to make that arrangement. It’s not something thats automatic,” Ruiz said.
Ruiz said that although borrowers agreed to pay back their loans, instead of bringing them down, it’s best to empower them to communicate.
“When you stay quiet in this type of issue then it is going to impact you adversely,” Ruiz said.
And you can always change your repayment plan if needed by continuing to communicate, because Ruiz believes setting your own path is better than having someone set it for you.
“Wage garnishing is detrimental to a family when you’re expecting a certain amount in your paycheck a month but the federal government is just taking back what’s owed in a student loan forcibly rather than voluntarily,” Ruiz said.
He recommends calling your student loan servicer before May 5, sooner rather than later.
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